Govt decision will push up rents

While property tax reform is tipped to be less severe than anticipated, today’s announcement by Prime Minister John Key is still likely to push up rents, First National Group said today.

First National manages more than 6500 rental properties for landlords around New Zealand between Kaitaia and Invercargill.

First National Group chairman Jill Quaid said there was relief in the network that rumoured additional capital gains tax and land taxes were not going to be introduced.

“The rural property market is already suffering so a land tax would have had a huge effect on that. And there is already enough legislation around capital gains tax so landlords in for the long term are not affected.”

Removing the ability of investors to offset their taxable income by negatively gearing their properties was even welcomed by some.

“The Government is saying that if you want to get into investment property you have to do so from a good business footing. That is fair enough but in reality that means rents will have to go up.

“Hopefully the Government realises that there still needs to be some incentive for people to become landlords.

“It is not in the country's best interest to see a huge exodus of private landlords. Who will house the people the Government can’t afford to?”