Prime Minister Jacinda Ardern on the latest social housing developments. Video / George Hurd
The government will unveil the details of one of its most powerful housing policies today, months after they were first announced to the public, but days before they go into effect.
In March, the government announced its housing package, which focused on expanding the light line test and removing the ability of real estate investors to deduct the interest on their mortgages from their taxes.
The policy was announced without any details being fully worked out, although details were promised before October 1.
The big question is what is a “new” property. To encourage investment in new construction, the government has promised to exempt new homes from the rules.
But what is a new home and how long a home is eligible to be new has never been answered.
Most of the big questions around politics point to this problem. For example, we do not yet know what happens to a landlord who moves into his “new” rental unit, then moves out and re-rents it.
National Party Housing spokeswoman Nicola Willis said revealing the details of the policy so late was “bad legislation”.
“This will create a bonus for tax lawyers and tax accountants,” Willis said.
“It’s absolutely the last minute as these changes go into effect on Friday, but only the details are released.
“It would be bad for tenants and risk raising rents, driving out owner fathers and mothers and discouraging investment in new housing.”
The policy has been criticized by the right, who say it is a government tax grab that will increase renters for tenants.
Due to a lack of full details on the policy, officials were unable to estimate how much revenue it will generate for the government, but Treasury Boffin admitted that if implemented in 2018 / 19, it would cost investors $ 800 million. There will be a loss.
Earlier this year, advice to Finance Minister Grant Robertson said it could cause highly leveraged real estate investors to exit the market, potentially selling to first-time home buyers.
The changes will be announced tomorrow by Revenue Minister David Parker and will be introduced as an amendment to a tax bill currently before the House.