Labour Party leader Andrew Little
It’s a perennial hot topic these days with stories of rising prices, affordability and rental squeezes in the headlines with growing regularity.
And, increasingly, it looks as though housing will be the issue de jour in this year’s election in September.
Roy Morgan research released last week shows that 41% of survey respondents picked government/ public policy/ housing issues as the most important problems facing New Zealand.
Within this bundle of concerns, housing affordability/increasing house prices (15%) and housing shortage/ homelessness (11%) are the most prominent.
Meanwhile, in the recent Mt Albert by-election, which was won by the Labour Party’s Jacinda Ardern, housing was a dominant focus for both candidates and voters.
Further, a recently revealed independent report on social housing, which was prepared for Treasury, criticised the government for lacking "an overall plan" to boost housing supply, particularly in Auckland
Opposition politicians seized on the report’s criticism to promote their own policies as means to better addressing the housing crisis.
With all these factors at play, it seems timely to take a look at what political parties are proposing when it comes to housing – and what that might mean for investors.
To date, National has not announced any new housing policies and continues to promote its existing package of measures, although it may in the run-up to the election.
National’s existing measures include the creation of Special Housing Areas, the Housing Infrastructure fund, the establishment of Urban Development Authorities, reform of the RMA, and requiring Councils ensure land supply for housing keeps pace with growth.
The Labour Party has a suite of housing policies, including a KiwiBuild programme which aims to build 100,000 affordable homes over 10 years and plans to grow the building workforce.
However, it also has three policies which are squarely aimed at the “investor” sphere.
One policy is to extend the existing bright line test from two years to five years, while maintaining the current exemptions.
This is intended to “target speculators who buy houses with the aim of making a quick capital gain”.
Another policy is to consult on the rules around negative gearing, which Labour describes as “used by speculators to make taxpayers subsidise losses on their properties”.
Given the party has only committed to consultation on negative gearing, further details of this are scarce.
But party leader Andrew Little has, in the past, said that it will be done in a way that's targeted at speculators, not investors looking for a stable, long-term return.
Labour also wants to ban non-resident foreign buyers from buying existing New Zealand homes to try and put a halt to foreign speculation
In a bid to tackle housing affordability, the Green Party is also keen to “reduce speculative investment in the housing market “.
It wants to do so by tightening the rules around loss attributing qualifying companies and by introducing a capital gains tax on all properties but the family home.
Additionally, the Greens have a focus on the provision of rental properties.
They want to shift the standard tenancy conditions towards more secure and predictable tenure arrangements and have long called for the introduction of a Warrant of Fitness for rental properties.
For ACT Leader David Seymour, the housing crisis is all about the restriction of land supply and the monopolisation of infrastructure provision and the consenting process by local and central government.
ACT would replace the RMA and incentivise councils to consent new houses and build infrastructure by letting them keep a portion of GST from new construction in their territory.
It would also reduce the costs of building and materials by getting councils out of the building consent business, replacing it with a regime of mandatory private insurance.
NZ First takes Labour’s proposal on non-resident foreign buyers to another level.
It would ensure New Zealand’s housing stock is restricted to New Zealanders by making non-residents foreign buyers ineligible for home ownership.
The party’s other investor-relevant policies include encouraging private investment in upgrading rental housing through the taxation system and making adequate insurance cover compulsory for all homes.
While there are other parties in the mix, of them it is perhaps Gareth Morgan’s new Opportunities Party (TOP) which has released the most attention-grabbing housing policy thus far.
TOP’s position is that all productive assets – including housing and land – can produce income annually and all income should be taxed, whether it is in cash or in kind.
To this end, it would levy an annual tax on property owners which it believes would help reign in house prices and crack down on property speculation.
Read more:
Urban Development Authorities on the way
Greens rental bill fails
TOP tax policy criticised
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