Grant Robertson, Finance Minister
by The Landlord
Grant Robertson, Finance Minister
The implementation of these policies has been confirmed by a party spokesperson, with their position on bright line extension being clarified on The Nation by Finance Minister Grant Robertson. They were both key housing policies for the Labour party during the 2017 election campaign.
Andrew Bruce from Auckland Property Investors Association says that these changes will have differing levels of impact on investors depending on the length of time they’ve been investing, and the type of investment approach that they have.
“The changes to negative gearing will have a quite significant impact on those at the beginning of their investment career,” he says.
He continues by saying that new property investors are often vulnerable when it comes to cash flow, and negative gearing enabled them to use losses on one property to offset tax on other income.
“The abolition of negative gearing is going to make life a lot harder for starter investors,” says Bruce.
He believes that the extension of the bright line test to five years is more likely to affect property speculators rather than long-term investors.
"The majority of property investors are in it for the longer than five years and are unlikely to feel massive levels of pain with the extension of the bright line test."
In March, Andrew Little (then Labour leader) said the changes to negative gearing and the bright line test would be slowly phased in over the next five years, coming into full effect by 2022. This timeframe has not since been confirmed.
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