Williams noted Labour had stopped National's state housing selloff, banned foreign speculators, had funding for 18,000 new public and transitional homes by 2024, supported Inland Revenue's chase of tax cheats, legislated for quicker resource management approvals, and extended the bright line test from 2 to 5 years to help dampen market prices..
Quite a different ideology and policy mix were evident in Smith's response. He pointed to the resurfacing of the Capital Gains Tax debate ("the same arguments we have heard many times before") and the failure of Labour's KiwiBuild programme.
He then identified what he called "the root cause (of the housing crisis) and that is getting enough land consented with the appropriate services and willing developers to fund the development ...(We must) encourage the private sector to invest and build homes ... Taxing those who are not responsible is not the answer ... We should also ... not discourage investors from building rental properties." Who could disagree? If only we could only weed out the speculators from among the investors, and make his housing affordable, especially for those on low incomes?
The Government package
Government's package announced yesterday will do little to please Smith, and has already been denounced by National and ACT, real estate agents, rentiers and some land developers. The Greens said it was doing too little. Most commentators called it a mixed bag, but not enough to solve the problem, especially for low income earners, Maori and Pasifika.
The aim is to make multiple property investment less attractive which should have a significant impact on prices which is all very good if it works, but it will not solve the main problem which is a shortage of affordable housing.
Housing Package at a glance -- Te Ao Maori News
♦ $3.8 billion fund to accelerate housing supply in the short to medium term
♦ More Kiwis able to access First Home Grants and Loans with increased income caps and higher house price caps in targeted areas
♦ Bright-line test doubled to 10 years with an exemption to incentivise new builds
♦ Interest deductibility loophole removed for future investors and phased out on existing residential investments
♦ Government to support Kāinga Ora to borrow $2 billion extra to scale up at pace land acquisition to boost housing supply
♦ Apprenticeship Boost initiative extended to further support trades and trades training
The bright-line test is to be extended to 20 years, except on new houses. or where a house is owner-occupied. Sell before that and you'll taxed on gains.
The package includes $3.8 billion to boost the number of houses being built, assistance to help pay for local council infrastructure, increasing the cap on First Home Grants by $5-10,000 (not enough in most cases to meet median house prices), stopping the claim back of interest, removing other interest deduction loopholes , and preventing more than one rental increase a year (a new tenant will pay the same rent as the one who moved out, unless there hasn’t been a rent increase in a year).
Read other related articles
Housing package detail -- Official Government release
No Right Turn - a self-undermining policy
Speculators public enemy number one. Bryce Edwards in the Guardian.
Property speculators have become public enemy number one in New Zealand’s rampant housing affordability crisis. Those buying, selling and renting out multiple properties have become wealthy at the expense of those in the middle and at the bottom of the market, who are paying high rents and struggling to afford to buy decent housing.
See also my previous post, Sticks and Carrots to help the housing market (pn705)
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