Mortgage advisers against bright-line test extension

Mortgage advisers are strongly opposed to any extension of the bright-line test, as speculation mounts that the government will change the law.

Wednesday, December 09th 2020

Finance Minister Grant Robertson has asked Treasury to review the effectiveness of the current five year test. Recent Inland Revenue figures suggest that a quarter of investors subject to the bright-line test did not pay the tax that applied.

With talk of the bright-line test being extended beyond five years, advisers fear the potential changes will harm the property market.

Glen McLeod of Edge Mortgages said: "Just like when it was adjusted to five years serious investors will take it in their stride. It is capital gains tax covered up," he added.

McLeod said an extension of the test would be a broken election promise, and said the move would not solve NZ's chronic undersupply problem.

Richard Brown of FCH Ltd said the move would be foolish.

"The ones who make the most noise, the Greens, some Labour supporters and the irrational envy crowd, fail to understand that any costs that befall investors, owners, businesses, all get passed on – usually to those who can’t afford to pay them, and then end up worse off.

"Any taxation, and incurred costs, etc will be passed on in higher property sale prices, higher rents, higher rates."

Matthew Dawe, a broker at, said the extension would "discourage people from selling, and also discourage new supply by taxing investment – decreasing supply, pushing up prices further".

He added: "Sydney has capital gains tax, stamp duty, land tax, estate tax and a top personal tax rate of 45%. A 1/24th share of 1,000m² land, 65m² two-bedroom apartment 8kms from the city centre is AU$800,000. Taxes make it worse by discouraging investment, we need more homes not less. This is why house prices always go up more under Labour-led governments throughout NZ history, we need a massive increase in supply, anything else is a waste of time."


On Wednesday, December 09th 2020 8:30 pm Steve culpan said:

Stop making such stupid self-serving comments Mr Dawes. This just makes us look greedy. You state "we need more homes not less" The problem is that we investors do NOT build new homes, we only buy existing homes and many fewer investors buy off the plans . If as a group we were actively financially supporting the building of new homes, then we can argue that a longer bright line test will not help this house builidng activity. But to suggest this stymies what is an empty capital investment that creates no jobs and no building activity is piffle!

Heartland Bank - Online 1.99
The Co-operative Bank - First Home Special 2.09
HSBC Special 2.25
ICBC 2.25
HSBC Premier 2.25
Kainga Ora - First Home Buyer Special 2.25
AIA 2.29
TSB Special 2.29
The Co-operative Bank - Owner Occ 2.29
SBS Bank Special 2.29
Westpac Special 2.29
Heartland Bank - Online 2.35
ICBC 2.35
HSBC Premier 2.35
TSB Special 2.49
SBS Bank Special 2.49
The Co-operative Bank - Owner Occ 2.59
BNZ - Classic 2.59
ASB Bank 2.59
AIA 2.59
China Construction Bank Special 2.65
Kiwibank Special 2.65
HSBC Premier 2.89
TSB Special 2.99
AIA 2.99
Westpac Special 2.99
ICBC 2.99
ASB Bank 2.99
China Construction Bank Special 2.99
BNZ - Classic 2.99
SBS Bank Special 3.19
Kiwibank Special 3.19
The Co-operative Bank - Owner Occ 3.19
Heartland Bank - Online 2.50
Resimac 3.39
Kiwibank - Offset 3.40
Kiwibank Special 3.40
Kiwibank 3.40
Bluestone 3.49
Select Home Loans 3.49
ICBC 3.69
The Co-operative Bank - Standard 4.40
The Co-operative Bank - Owner Occ 4.40
Kainga Ora 4.43

More Stories

North Shore’s a sure thing

Thursday, April 15th 2021

North Shore’s a sure thing

Auckland’s North Shore is booming, writes Joanna Mathers, and development potential opened up by the Unitary Plan is the focus for many.

Mortgaged investors still buying, but the game has changed

Wednesday, April 14th 2021

Mortgaged investors still buying, but the game has changed

March has continued a record peak for investors buying residential property.

Pandemic shifting the dial on residential design

Tuesday, April 13th 2021

Pandemic shifting the dial on residential design

From master planning entire communities to interior design, Covid-19 is reshaping the way developers, architects and designers are looking at houses and the environments around them.

Landlord polls: Rents will lift, sales will be low

Friday, April 09th 2021

Landlord polls: Rents will lift, sales will be low

Three recent landlord polls show the majority are going to lift rents in response to the Government’s decision to scrap mortgage interest deductibility against income.