"I am extremely stressed about how to deal with this." "We are being painted as 'evil and greedy'. I cannot talk to any of my friends or loved ones about this because of it. I am quite alone in dealing with one of the hardest blows I never thought could be possible or legal to do." "I feel this is a massive kick in the guts." "The current Government are delusional if they believe what they are doing is helping people."
When the Government announced tax changes for landlords and investors a month ago, it came as a shock. The changes are designed to "tilt the balance" towards first-home buyers by targeting others - the investors. It's divisive politics that asks New Zealanders to pick a side, but politics isn't a game. The rules Parliament makes impact real people. I've heard directly from renters, hopeful first-home buyers, and retirees about how these tax changes affect them. Personal stories, struggles, and fears for the future have been shared with me via email or over a beer.
The stories below came to me through the Act Party website. They show the reality of Labour's rule changes and they deserve sharing:
• I'm currently in discussions about selling the rental house but I feel so bad about our tenant. He has a criminal record and bad debt. He is aware of the new tax and extra cost to us. He's asked if we could increase his rent to help but I know he can't afford that. He just wants to make sure we don't sell as I'm not sure many others would give him a home. He's a beneficiary so I'm sure he could go into emergency accommodation but that's not ideal for him, or his kids … anyone.
• We're an older middle-class couple looking to retire. We really need some help to make sure our retirement is the one we've been working towards. Our rentals mostly house Winz tenants. What will happen to them if we sell? We don't understand why the Government's penalising people who're helping them house people.
• It's been a tough year. I started studying again, then Covid hit, money troubles started and through no fault of my own I'm now a single mother to two teenagers. We live on a tight budget. If my rent rises, I will become homeless. There are not many rentals around anymore and I will be overlooked applying as a single mother on a student allowance.
• We bought a farm with two houses on it. We rent out the other one to help with the mortgage on the farm. We're not investors or greedy. We worked hard to get this for our future and retirement. We already work our fingers to the bone. We're now faced with a bigger tax bill. What should we do? Sell our home and give up?
• A few years ago, my marriage ended. My ex-wife and kids kept the house. I had hardly any money but with my job secure I managed to buy a rental. I figured the tenants would be able to help pay the mortgage and I'd have some security for retirement. I'm providing a home while putting myself into a position where I hopefully wouldn't need the Government to look after me in retirement. This tax leaves me confused. Am I rich? Not by any stretch of the imagination.
• We bought a first home five years ago. Then I was lucky enough to get a job on a farm with a house included. We've rented out our home at a loss. With these tax changes we're left in a difficult situation, either pay more tax, or sell and find it difficult to get back on the ladder.
What the Government fails to understand is that people are interdependent. Renters are potential first-home buyers, who become homeowners, then investors as they build a nest egg for retirement. As these stories show, life is complex. There will be lots of unintended consequences from this new tax as it squeezes the middle class and imposes new costs on renters struggling to get by or save for that first home.
The way to solve the housing crisis is not to divide New Zealanders into investors and potential first-home buyers and keep fighting over a shortage. It's to unite New Zealanders behind good ideas and build more homes.
We need to change land use planning, infrastructure funding and building consent systems for all builders, not just the Government.
Stories shared with permission.
• Brooke van Velden, MP, is the deputy leader of the Act Party.