Earlier this month, the government announced its intention to grant institutional build-to-rent investors an outright exemption to the interest limitation rule, that those meeting its (lowish) criteria would qualify for interest deduction in perpetuity. Once again, and rather unsurprisingly, private investors who own and operate 87% of residential rental properties in New Zealand are left out in the cold.
Undoubtedly, when the empowering bill comes to pass*, we will have more to say about the matter. In the meantime, here is our statement to the press:
It is inherently problematic when decisions are being made behind closed doors with invited lobbyists, and the spin room consists of almost only those big businesses that are in line for massive financial gains because of those decisions. This kind of opaque favouritism has never delivered any real housing solutions for New Zealanders. Where is the Treasury report? What’s the IRD’s input? Where are the longitudinal and cross-sectional studies that say tenants are better off renting from corporations than people?
It is dishonest to characterise private landlords as incapable of delivering a top-notch rental experience, just as it is fanciful to suggest that corporations always put tenant customers ahead of shareholders. This government proposes to give institutional developers (likely funded by foreign money) a tax break. That’s their prerogative. But what’s the trade-off for the public? Merely offering but falling short of being bound by a 10-year tenancy is not good enough. New Zealanders, especially our renters, deserve real housing solutions, not lip service.
We look forward to the bill’s introduction in Parliament and expect it to follow a rigorous legislative process, including broad public consultation. Something this consequential that stands to alter the landscape of our residential rental sector deserves all due process. To pass...
