In 2024, the coalition government, comprising the National Party, NZ First, and ACT, implemented a series of significant policy changes impacting the property market. These changes are primarily aimed at revitalising the rental market, encouraging property investment, and addressing some of the challenges faced by both landlords and tenants. Here is a summary of the main policy changes:
1. Mortgage Interest Deductibility
One of the most notable changes is the reinstatement of mortgage interest deductibility for landlords. Initially set at 80% from April 2024, it will increase to 100% by April 2025. This policy, previously removed by the Labour government, aims to alleviate financial pressures on landlords, potentially leading to increased rental property supply and stabilisation of rent prices. Sue Harrison from the New Zealand Property Investors Federation highlighted this as a key measure to encourage property owners to retain and invest in rental properties.
2. No-Cause Evictions
The government has reintroduced the ability for landlords to issue 90-day eviction notices without providing a reason. This change has sparked debate, with proponents arguing it makes landlords more willing to rent to a broader range of tenants, knowing they can reclaim their property if necessary. Critics, however, worry it may discourage tenants from raising legitimate concerns about their living conditions​.
3. Notice Periods
Notice periods for ending tenancies have been adjusted. Tenants now need to provide 21 days' notice, down from four weeks, while landlords must give 42 days' notice if they plan to move into the property or sell it, reduced from three months. This change is intended to provide more flexibility and ease of transition for both parties.
4. Pet Bond
A new policy allows for the introduction of a "pet bond," enabling landlords to require a larger bond amount if tenants wish to keep pets. This measure aims to make it easier for tenants with pets to find housing, while also giving landlords some financial protection against potential damages caused by pets​.
5. KiwiSaver for Rental Bonds
The coalition government has also proposed allowing people under 30 to use their KiwiSaver funds to pay rental bonds. This policy is particularly aimed at helping young tenants, such as students and recent graduates, who may struggle to afford the upfront costs associated with securing a rental property.
Impact and Future Outlook
These policy changes are designed to create a more balanced and dynamic rental market. By providing financial relief and flexibility to landlords, the government hopes to increase the availability of rental properties, which could help to moderate rental price increases. For tenants, the introduction of measures like the pet bond and the ability to use KiwiSaver funds for bonds aims to reduce barriers to securing rental housing. As these policies take effect, their success will depend on various factors, including market responses and broader economic conditions. Both landlords and tenants should stay informed about these changes to navigate the evolving property market effectively.
