Housing package not addressing crisis

By Te Ao - Māori News

Today's housing package announcement by the government is resetting the 'bright-line property rule' to curb property developers and investors.

But National claims it will make little difference for first home buyers. 

The bright-line property rule looks at whether a property was either bought on or after October 1, 2015, through to March 28,  2018, and sold within two years or if it was bought on or after March 29, 2018, and sold within 5 years.

Under today's announcement, homeowners will have to own their home for at least 10 years before selling to avoid paying tax.

National leader Judith Collins says the bright-line test aimed to catch people who were "flipping" houses. "Basically, people who were buying a house and flipping it over the next day."

"That was the right thing to do at that time - it was over two years. This government has taken a bright-line test and turned it into a full-scale capital gains tax."

Finance Minister Grant Robertson says removing interest deduction loopholes for property investors tilted the balance toward first home buyers.

"The New Zealand housing market has become the least affordable in the OECD. Taking action is in everyone's interests as continuing to allow unsustainable house price growth could lead to a negative hit to the whole economy."

$3.8b housing acceleration

In today's announcement the government revealed a $3.8 billion fund will go toward accelerating growth in new housing.

"This is a package of both urgent and long-term measures that will increase housing supply, relieve pressure on the market and make it easier for first-home buyers," Prime Minister Jacinda Ardern says,

"The housing crisis is a problem decades in the making that will take time to turn around but these measures will make a difference."

But Collins claims the new housing incentives will make it harder for those looking at buying their first home.

"It's harder for first home buyers and the reason is rents will go up again. So we have already seen rents rise under three and a half years of a Labour government."

She says, "As usual, no detail, no timeline, no targets. This whole announcement is just KiwiBuild Mark II."

KiwiBuild was set up by the government in 2018 to assist home buyers and to address the falling Kiwi homeownership rate. It was widely regarded as a failure when few houses were built by the time of the general election.

Housing Minister Megan Woods said the government was speeding up the pace and scale of house building with a Housing Acceleration Fund.

"We estimate the Housing Acceleration Fund will help greenlight tens of thousands of house builds in the short to medium term.

"This fund will jump-start housing developments by funding the necessary services, like roads and pipes to homes, which are currently holding up development.

"The Government will also assist Kāinga Ora to borrow an additional $2 billion that will assist in bringing a range of development forward through strategic land purchases."

Meanwhile, 22,000 people are on the statehouse waiting list and thousands of families are raising their children in motels.

Housing Package at a glance

♦ $3.8 billion fund to accelerate housing supply in the short to medium term

♦ More Kiwis able to access First Home Grants and Loans with increased income caps and higher house price caps in targeted areas

♦ Bright-line test doubled to 10 years with an exemption to incentivise new builds

 ♦ Interest deductibility loophole removed for future investors and phased out on existing residential investments

♦ Government to support Kāinga Ora to borrow $2 billion extra to scale up at pace land acquisition to boost housing supply

♦ Apprenticeship Boost initiative extended to further support trades and trades training