National says rental shake-up needed

The National Party believes a shake-up of the tax treatment of rental properties is back on the agenda.

Following a report this week showing New Zealand has the least affordable housing in the world, alongside Australia, Housing Minister Maryan Street has said the Government is looking at its options with a view to bringing down house prices.

Since 1991 landlords have been able to deduct losses on investment properties from the tax they pay on other income.

National Party Deputy Leader Gerry Brownlee says taking away the tax break would be a fundamentally stupid move. He says if extra costs are imposed on landlords by a change to the tax regime, these would simply be passed on to tenants.

Mr Brownlee says the problem with housing affordability is not with the cost of houses - it is the size of incomes.

With National blaming low pay and the Government considering tax changes, another housing market watcher has fingered high interest rates as the reason it is so hard to get on the housing ladder.

Interest rates for a two-year fixed mortgage topped 9.3 per cent last month. David Chaston of the website interest.co.nz says the rates are keeping home-loan affordability near its worst levels ever.

He says nationally it takes almost 2.1 median incomes to afford a mortgage on an average house. Mr Chaston says that is twice as much as a family needed five years ago.

- NEWSTALK ZB


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