Investor tax burden already affecting rental property

Property Investors Federation executive committee member Tim Horsbrugh told Parliament’s Finance and Expenditure Committee at the end of last year although the Government’s objective of removing interest deductibility was to improve affordability for first home buyers by knocking back investor demand for existing housing this has not happened.

“Instead, the shortage of rental property has been made worse, leading to higher levels of homelessness, reduced availability of rental property and higher rents.”

He pointed out by allowing large build-to-rent developers, investors and operators to claim mortgage interest as a deductible expense if they allow tenancies of 10 years, this flies in the face of private investors being able to do the same through a plan the federation has already put to the Government and other political parties.

The plan to fix the rental crisis includes a new long-term tenancy option in addition to the existing periodic and fixed-term options available. This option would then be more widely available to tenants wanting security of tenure.