One change could help renters’ cost of living crisis

Landlords are facing increasing costs in higher interest and council rates, insurance and a bigger tax burden along with a drop in the number of people who rent.

Property Investors Federation vice-president Peter Lewis says if students and workers do return rents could go up, but it’s not guaranteed as rents are set to market conditions and the amenity of the property: The market is price sensitive – as little as a $20 per week rise in rent can make the difference between a property renting quickly and sitting vacant for a long time.

Lewis says the Government’s removal of mortgage interest deductions would make the biggest difference to landlords and tenants. 

Federation president Sue Harrison says the new Prime Minister Chris Hipkins could make this change. “It’s pretty well understood that if you borrow money to then derive income you can claim a tax deduction for the cost of borrowing that money. On that basis, investors should continue to be able to offset that cost against rental income earned.”