I think there’ll be a huge sugar hit to housing investors if National ever becomes Govt.
If they own a house with a loan of $400,000 at an interest rate of 7 percent, they will get an additional tax rebate of $10,920 each year if they’re on a 39 percent tax rate.
That generous rebate is just on one house. If they own four houses all with equivalent mortgages they’ll get $44,000; for eight houses it would be $88,000.
I could be wrong but it would be unusual that landlords use this sugar hit to reduce the rents they charge.
Of course, those who have owned investment properties longer and have smaller loans will get less, but I think there are many recent purchasers who will be in this money space.
On the reverse side of the coin, those who will need to wait an extra two years to qualify for superannuation will lose income to the value of around $50,000 while waiting to qualify. We know how many struggle on pensions already.
Many on low wages will be lucky to get a tax rebate of $5 a week so it seems that once again the NZ National Party will favour those who have the wealth already.
The poor will miss out while the rich get richer.
That’s a sad and unnecessary decision from a political party that will have no option other than to take $billions away from public services like health, education, police if they make tax decisions like this one.
Mary-Ann de Kort
