Are you holding your breath?

Are you holding your breath?

In the upcoming 2023 election in New Zealand, the fate of landlords and tenants is hanging in the balance, with potential policy changes that could significantly impact both groups. The National Party has expressed strong support for landlords and intends to reverse some of the recent changes to the Residential Tenancies Act, including the removal of no-cause terminations and the conversion of fixed-term tenancies into periodic tenancies. These changes were introduced in 2020 but came into effect in 2021.

The key policy areas under consideration (from various parties) include:

1. Reinstating landlords' mortgage interest deductions.
2. Adjusting the bright-line test duration for selling rental properties.
3. Reversing ringfencing of rental losses.
4. Introducing a wealth tax on high-value assets.
5. Implementing a vacant house tax to incentivize renting or selling vacant properties.
6. Introducing a land banking tax.
7. Reinstating 90-day no-fault terminations.
8. Introducing rent controls to limit annual rent increases.
9. Implementing a rental warrant of fitness to ensure quality rental properties.
10. Creating a landlord register for transparency and compliance.

National and Act parties are aiming to shift the balance more in favor of landlords by reversing tenant-favored policies implemented by the Labour government. They argue that these policies have discouraged landlords from offering their properties for rent.

On the other hand, the Green Party and Te Pāti Māori advocate for policies such as a wealth tax, rent controls, rental warrant of fitness, and a landlord register, with the argument that this could have a more tenant-friendly impact on the rental market.
Our argument is that all (except the wealth tax) exist already. Rent controls are covered by the fact that you cannot raise rent above the market already. The warrant of fitness is covered by the existing Healthy Homes, and the Landlord register - I would be interested to know where or to whom they want this register made public to because again this already exists with Tenancy Services, an arm of the government - through bond lodgement. With 3/3 wrongs there I think we can safely cross off Greens as having a clue about how Real Estate and investing works...
For those thinking the 'wealth' tax wont affect me, if you are a home owner in Auckland, maybe it wont today but it will tomorrow. The average nz property doubles in value every 7-10 years. The average Auckland home is $1m today. 

The argument "it doesn't matter if private landlords all exit the market because the homes are then available to renters" is incorrect. Most renters are not in a position to buy.
The average annual household income in NZ as at 2021 was $111,000 gross. That's pre tax, pre kiwisaver, pre student loan. At best they will net $82,000 a year, $1576 per week and likely under. Considering house prices today and lending restrictions (LVRs as well as restrictions on properties banks will lend on) it is just not as simple as renters will buy the investment properties for their homes and everything is fine for everyone.
 

The outcome of the election will determine the direction of these policies, potentially leading to significant changes in the rental sector. Tenants and landlords will have to wait until October 14th to see how the election results may affect their lives and the rental laws, with the potential for a significant shakeup in the rental sector.

Ultimately, we believe landlords, should and in fact need to be encouraged rather than punished for their contributions to the housing market. Striking a balance between regulation and incentivising investment is crucial to address housing needs and supply adequately.

We know what outcome we're hoping for. We stand with landlords. See you at the polls.