Simply put, little change for long-term property investors.
Increasing the Bright-line Test from 2 to 5 Years.
Fine. It means that property traders will have to pay tax on their profits, it’s only fair. I have to pay tax on anything I sell within 10 years, and if it’s a development property then the gains are taxable forever.
Banning Foreigners from Buying Property
Little effect. There is no data to prove that foreigners are buying up lots of NZ property. We haven’t sold to any foreign buyers and other people in the industry that I know aren’t selling much to foreign buyers either. I think the talk of foreign buyers is just a scare tactic employed to win votes.
A Healthy Homes Bill and Some Form of Rental Property Warrant of Fitness
Again, fine. Too many landlords do not maintain their rental houses to a reasonable standard and need to be forced to spend some money on them to make them comfortable and safe for tenants to live in. I have two problems with this extra layer of government intervention, one is extra government involvement, which generally produces negative outcomes and the other is the extra cost to landlords like us who already provide good quality accommodation. We will be penalized because of the actions of others.
More State Houses
This is a shame. Private companies should be adding the additional housing, not the state. Just look around at the state housing we have now, do we really want the state to build more? Private companies have the capacity to build, what’s holding us back is two-fold:
- The lack of pre-sales enabling us to obtain bank funding, thanks to banks making it very difficult for people to buy property off-the-plan and secondly the extremely difficult and time-consuming processes involved in consenting.
- The consenting process could be sped up and costs reduced by outsourcing it to private industry. Councils should be involved in the basic necessities like collecting rubbish and licensing dogs, anything complex should be outsourced.
I don’t have crystal ball, but I do have over 20 years of experience as a residential landlord. My view is that all of the talks of government intervention, whether or not the policies are introduced, is that rents will continue rising and property will continue to rise in value, albeit at a possibly slower rate for the next few years before it takes off again.
Freedom and Prosperity
And please keep something in mind. Property investment isn’t just about making money, it’s about creating freedom. If you don’t have any assets or income, you don’t have any choices, you are beholden to the state. Regardless of what the negative media is saying, property investors have a very important role to play in the New Zealand property market, they provide in the main, good quality housing for people who can’t or don’t want to buy.
Most landlords in NZ own 1-3 rental properties. They are good people planning for their future. They look after their rental properties and treat their tenants with respect. They do no deserve the bad rap they are getting at the moment where it almost seems that if you have any money or investments your greedy and uncaring.
I say good on you for taking the risk, planning ahead and trying to create a better future for yourself, your family and your community by investing in property. You can’t help anyone without time or money – there’s only one type of people who talk about money more than the rich – it’s the poor, they can’t talk about anything else.
John Kenel, Assured