New Government – new property rules

A faster timeline for the reintroduction of mortgage interest deductibility is the biggest gain for property investors, who will be able to claim 60% this tax year, 80% in 2024/25 and 100% in 2025/26.

New Zealand Property Investors Federation president Sue Harrison says this change alone means the Government is going in the right direction. “The tax was the single biggest thing that was hurting the housing and rental markets. It is a huge relief as many property investors and landlords were suffering financially because of it.”

She doesn’t expect property investors to flood back into the market immediately. “There is still tax to pay for another year, so the policy is not going to be an overnight success, but it will arrest the flow of properties being sold because investors cannot afford to keep them.

Investors have still got huge costs with tax, higher mortgage rates as well as council rates and insurance, in particular, escalating. They have to keep juggling those costs alongside maintenance and expectations around other things, such as topping up mortgage payments, so  at least it gives some relief, although rental yields are still low.”