Be the 1st to hear about new developments

Assured Property Investments Assured Property Investments
  1. Current Listings
  2. Past Developments
  3. News & Guides
  4. Customer Stories
  5. Community Involvement
  6. The Property Development Club
  7. About Us
  8. Contact
07 823 2525
Author John Kenel16 August 202208 Aug 2022

Economy

Tax exemption discriminates against ordinary landlords

I agree 100% with Andrew King.  This tax exemption for big business and iwi is discrimination against all ordinary landlords, the people who provide the vast majority of rental property in NZ today.  They should be supported, not penalised.

John Kenel
Assured Property

Full article below:

Giving build-to-rent developers an exemption from the Government’s tax rules removing interest costs as a tax deduction discriminates against ‘mum and dad’ investors, says the Property Investors Federation.

Housing Minister Megan Woods says upcoming tax legislation will give the exemption to new and existing build-to-rent developments rules in perpetuity.

The exemption will apply retrospectively from 1 October 2021. Owners of build-to-rent assets can claim interest costs relating to these assets for as long as the asset is held and operated as a build-to-rent development.

The proposed requirements for the new asset class include:

  • That tenants must be offered a fixed-term tenancy of at least 10 years with the ability to give 56 days’ notice of termination, but they may agree to or request other tenancy offers;
  • The developments must have at least 20 dwellings in one or more buildings that comprise a single development, on either a single parcel of land or multiple contiguous parcels;
  • The dwellings and any common land or facilities for those dwellings must  have a single owner;
  • Dwellings can be held in one or more titles;
  • The buildings that a build-to-rent dwelling is in, can include other dwellings or commercial premises that do not form part of the build-to-rent development;
  • and the dwellings are used or available for rent under the Residential Tenancies Act.

Property Investors Federation president Andrew King says it appears the Government has bowed to big business lobbying and changed the rules for large developers turned landlords.

“Minister Woods says build-to-rent developers provide high quality rental housing so these tax benefits are going to benefit high income earning tenants rather than the vast majority of tenants as a consequence.”

King says the vast majority of tenants cannot afford brand new, high end accommodation. “They want well maintained, warm, dry but ultimately good value rental accommodation.”

Build-to-rent is a different model of residential housing to that commonly seen in New Zealand’s current private rental market, where small scale investors own individual or small numbers of dwellings, says Woods.

She says It has the potential to increase the supply of quality rental housing at pace and scale. “Build-to-rent can also support housing construction at times when securing buyers and finance for build-to-sell developments is more challenging, as it is now.

“The build-to-rent sector can attract different forms of long-term investment such as from iwi or superannuation funds. This is critical to providing new general and market affordable supply.”

Woods says the tax exemption will encourage further development of this type of rental supply and enable the full potential of this sector.

However, King says the vast majority of rentals are provided by ordinary Kiwis who own one or two rentals. “They mostly provide an excellent service to their tenants and new laws mean they must provide a warm dry rental homes. These private landlords operate with low overheads and low (often negative) margins that actually provide true value for tenants. These are the rental that should be supported, not large corporate developers.

He says unfortunately, the discriminatory removal of interest costs as a legitimate tax deduction has seen the cost of many rental properties increase and will continue to increase as the taxes are increased over the next four years for the majority of rental properties.”

The federation’s published plan to fix the rental crisis include removing the three tax increases of disallowing mortgage interest as a tax deduction; ringfencing and the Brightline test would provide some real relief for the majority of tenants.

King says tenants groups have said there is a rental, but allowing mortgage interest deductibility for high-end rentals will not solve anything for the majority of tenants, it should apply to all rentals.

The federation has also suggested introducing a security of tenure model based on the German system and this would provide long-term security for the majority of tenants, not just for high-income tenants who are likely to benefit.

Source: Landlords.co.nz

Author John Kenel16 August 202208 Aug 2022
  • Facebook
  • Twitter
  • #business
  • #demand
  • #economy
  • #Hamilton
  • #Hamilton city council
  • #housing
  • #housing market
  • #housing shortage
  • #housing-changes
  • #housing-nz
  • #property
  • #property managers
  • #rental market
  • #rental-homes
  • #rentals
  • #supply
  • #supply-and-demand
  • #tenants

More news

Author John Kenel15 May 2025

88 Billion in new Taxes from the Greens

Let’s break that down. There are around 5 million people in New...

Read more

Author John Kenel15 May 202505 May 2025

Building Pulse Podcast – Part 2 of 2

Innovation Is Possible - If We Let It Happen After laying out...

Read more

Author John Kenel13 May 202505 May 2025

BuildingBuilding Pulse Podcast – Part 1 of 2

With over 20 years in property development and over 1,000 homes delivered,...

Read more

Featured properties

Home

sold

3 bedroom duplex

Brand new quality homes

Bedrooms 3
Bathrooms 1
Garage Single1 garage

Townhouse

sold

2 & 3 bed townhouses

City Living on River Ridge, Hamilton

Bedrooms 3
Bathrooms 2
Garage Single1 garage

Townhouse

sold

2, 3 & 4 Bedroom Townhouses

Townhouses on Te Rapa

Bedrooms 3
Bathrooms 3
Carparks 2

Assured Newsletter

Be first to know about
new developments

free

new

The Hamilton Property Guide

2024 issue edited by John Kenel, Assured Property

View here
  • Home
  • Current Listings
  • Past Developments
  • News & Guides
  • Customer Stories
  • Community Involvement
  • About Us
  • Contact
  • Privacy Policy
  • Facebook
  • Twitter
  • LinkedIn

Visit

63a Alpha Street, Cambridge
Monday - Friday (9am - 5pm)

Contact

info@assuredproperty.co.nz 07 823 2525

© 2025 Assured Property Investments. 

Site by Brontë + Benek