The recent victory of the National Party in the general election has stirred discussions about its potential implications for landlords. With the National and ACT's landlord-friendly stance, several changes are anticipated in the housing and rental sectors.
Tax Relief and Interest Deductibility
One of the most significant promises made by the National and ACT parties is tax relief for landlords. They have committed to restoring the ability for landlords to deduct mortgage interest on rental properties from taxes. This move is expected to provide financial relief to many landlords, making the rental business more viable. NZ First, potentially a part of the new government, also supports this restoration.
Bright Line Test Adjustments
The bright line test, which taxes profits from the sale of an investment property, had been extended to 10 years by the Labour government. National plans to reduce this back to two years, while ACT proposes to abolish it altogether. This change could lead to more properties being put up for sale, potentially benefiting the market.
Reinstating "No Cause" Terminations
Both National and ACT have shown interest in reinstating the 90-day "no-cause" termination notices. Such a move could make landlords more open to renting to tenants with imperfect histories, as suggested by Property Investors Federation vice-president Peter Lewis. However, it's essential to strike a balance to ensure tenants' rights and security are not compromised.
Addressing Vilification of Landlords
There's a hope among the landlord community, as expressed by Lewis, that the new government will end the perceived vilification and blame placed on landlords. The sentiment is that landlords should not be held responsible for broader societal issues.
Security of Tenure for Tenants
While the removal of 90-day notices was seen as a measure to ensure tenants' security, it had unintended consequences. Nick Gentle, a property investor, emphasises the need for a solution that offers tenants security while also safeguarding landlords from problematic situations.
Clarity on Future Policies
With National and ACT having slightly different plans, especially regarding the timeline for restoring interest deductibility, clarity is sought. Property accountant Anthony Appleton-Tattersall points out the need for clear legislation and timely announcements so landlords and investors can make informed decisions.
The National Party's win, in collaboration with ACT, indicates a shift towards more landlord-friendly policies. While these changes aim to ease the burden on landlords and invigorate the rental market, it's crucial to ensure that tenants' rights and interests are also protected. The coming months will reveal how these proposed changes unfold and their impact on New Zealand's housing landscape.
