Source: Taxpayers Union
23 MARCH 2021FOR IMMEDIATE RELEASEResponding to the Government’s housing policy announcements, New Zealand Taxpayers’ Union spokesman Louis Houlbrooke says:“Grant Robertson made a clear promise not to extend the bright-line test. He’s now broken that promise.”“You don’t make housing cheaper by taxing it.”“Investors will get around an extended bright line test by simply holding their properties for longer. That’s terrible for home buyers, because it means less liquidity the market. In fact, it can drive up prices as more buyers bid for fewer homes.”“An extended bright line test is a capital gains tax, levied at one of the highest rates in the developed world. It has some of the same fatal flaws as Michael Cullen’s failed proposal. ‘Family homes’ are excluded, which limits any beneficial effects of the tax and provides a loophole for investors to designate properties as the ‘family home’ of a spouse or child.”“Making property investment more costly, through both the bright-line test and the removal of interest deductibility, will make it even less attractive to be a landlord. Instead of renting out a second home to a family, property owners will stick one of their kids in it, meaning fewer properties available to renters, and higher rents as a result.”“It’s astonishing that the Government is pushing through these policies in a matter of days without a select committee process. Tax policy is notorious for its unintended consequences. It deserves proper scrutiny.”On changes to income caps for the First Home Grant, Mr Houlbrooke says: “Increased housing handouts via the First Home Grant will only push prices up faster. It’s throwing taxpayer money on the housing bonfire.”
