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No lolly scramble for landlords

Landlords have little to celebrate in the Budget.

Thursday, May 18th 2023, 2:57PM 1 Comment

by Sally Lindsay

The Government has not moved on two of its biggest taxes affecting landlords – the 10-year brightline test and the phasing out of mortgage interest tax deductibility.

Instead in a large capital allocation, the Labour Government has put aside $3.1 billion for the building of 3,000 new state houses by 30 June 2025.

Finance Minister Grant Robertson says the housing crisis is not going to be fixed overnight and requires ongoing investment after the previous Government’s sell-off of state houses.

“Due to the rising cost of building products and services around the world, the Budget also invests $707 million total operating and $3.6 billion total capital to cover cost increases under the existing build programme funded through Budget 2020.”

Robertson says the country’s housing remains among the least affordable in the OECD. New Zealanders spend a greater share of their income on housing on average than most other OECD countries – up to 56% in some areas of the country. 

Despite house prices easing by 16.8% since their November 2021 peak, they remain above their pre-COVID-19 level in nominal terms.

Robertson says building consents data suggests demand for building housing has returned to around its pre-COVID-19 level, with new residential building consents falling 9% in February to 3,206 monthly consents (seasonally adjusted).

“This is likely due to falling house prices, rising interest rates, and cost pressures weighing on intentions, Robertson says. 

“While disruption from the Auckland Anniversary Weekend flooding and Cyclone Gabrielle may have contributed to the fall, the slowdown in consents is consistent with expectations of softening domestic construction activity.

“Activity is likely to be supported by rebuild and recovery work from the recent severe weather events, although this is not expected to fully offset the slowdown in construction activity,” Robertson says.

He says many low-income homes lack adequate insulation and efficient heating and $402.6 million will support the extension and expansion of the Warmer Kiwi Homes programme beyond June 2024.

Robertson says over four years, this investment will provide more than an estimated 100,000 installations of heating and insulation, 7,500 hot-water heat pumps and five million efficient LED light bulbs helping individuals and families with the cost of living through lower energy bills, while also improving wider health outcomes and reducing emissions through lower electricity consumption.

Tags: Budget

« Reminder to check property tax statusWorld of pain coming and landlords give up »

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Comments from our readers

On 19 May 2023 at 1:52 am Glenn Morris said:
Who on earth would take advise from Robertson. A one month change in the number of building consents does not make for a trend. Based on the latest Statistics we are likely to consent 43000 new dwellings between now and June 25 which at the very long average of 33% of all dwellings gives us 14300 new rentals. So an additional 3000 new state houses over that period will not change anything much. The government is not even keeping up with the normal growth rate of the private market.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

Last updated: 20 May 2024 10:01am

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