Barfoot boss expects bright line test to be extended

Peter Thompson expects the brightline test to be extended. Photo / File

Peter Thompson, Barfoot & Thompson chief, anticipates the Government's bright line test on residential property will be extended, whatever parties make up the ruling coalition.

"It's an area that needs to be looked at.

"Yes there's true investors and then those who just use residential property to write off losses and taxes. It's an opportunity to tidy it up a little. Extending it would make people hold property more and give tenants more surety of tenure."

The bright line test now applies for investors who buy and sell within two years but Thompson says that could be extended by three to five years soon.

Asked if extending it was against the agents' interests as it would encourage fewer investors to sell, Thompson said the change could be perceived as having that effect.

"But I'm also realistic and yes, it would be nice to see property turning over the whole time but I want a more steady market rather than an up and down market.

"Certainly if Labour gets in, it's one of the first things they will bring in."

Extending the timeframe of the tax is not something he wants.

"But I think about what's good for the country - whether it's five years or extending it to three - three would be my preference."

The current test requires investors to pay their full applicable income tax rate on any gains they make from residential property sold within two years of acquisition, subject to some exceptions.

Thompson has long advocated for the Reserve Bank's loan to value ratio limits to be removed from first-home buyers purchasing for under $600,000 and he reiterated that stance, rejecting criticism from some sectors that he just wanted to drive more sales.

Rather, he said, he wanted to encourage initial home ownership because he said that was in this country's interests.

He also wants Auckland water transport to be extended, and after returning from Sydney cheering the All Blacks' victory over the Wallabies for the Bledisloe Cup, he was full of the benefits of an efficient public transport system.

He has one very definite route in mind: ferries leaving from Pine Harbour/Beachlands to dock at Maraetai, Half Moon Bay, Glendowie, St Heliers, the Tamaki Yacht Club for Kohimarama passengers, then berthing at Downtown.

"Auckland narrows to about 2km from one coast to the other. Trying to get all the crowds through via train and road is going to be very difficult. I don't think we use the waterways enough."

For the Shore, he wants a Takapuna ferry connection and further capacity from West Harbour.

"We also need to utilise the park-and-rides and keep cars out of the city."

Yet he rejects a CBD vehicle congestion charge. "People need to be able to get to work. I bring a car in every day. I'm in and out of the office.

"A congestion charge would just be another tax. Years ago, we wanted people to come back to the heart of the city. If you start charging them, people won't come to the city."

He questioned the practicality of Labour's Kiwibuild 100,000 new 10-year residential construction plan.

"Where are they going to get the money for that?"

The Herald's Mood of the Boardroom 2017 Election Survey attracted participation from 118 respondents. The results were debated this morning by shadow finance spokesman Grant Robertson and National's Finance Minister Steven Joyce.