Is tax really the answer to housing affordability? The editorial in the NZ Herald today motivated a reader to send us these observations:
‘It has long been a dream for New Zealanders to own their own home and it is not a dream that we should dampen. Helping families own their own home may increase housing demand but that’s why it’s so important to address the supply of reasonably priced houses.
With policies from Welcome Home Loan Schemes to Kiwisaver, from new developments as the one in Hobsonville (‘economic vandalism’ still Mr Key?) and legislation that will see more land freed up and more affordable housing being built, there is a mesh of policies starting to reach critical mass.
Yes, much of the housing boom has been from investment properties. That;s why it makes sense to have introduced tax incentives to make other investments more attractive, giving real alternatives for long term investment. The recent changes to PIE taxation and the introduction of KiwiSaver provide alternative ways of saving and investing in a secure, simple and more profitable way.
Simply changing the tax structure around rental properties to discourage rental investment would mean landlords simply pass on the costs to tenants, and the supply for rental properties would decrease. This would simply punish students and young workers and make it harder for young families to save for a deposit.
Rather than pull these proposals apart why not ask for concrete plans from other parties so that we can really make an informed decision over which is the best policy to deliver?’