There are fundamental flaws in the Government's tax changes on rentals with non interest deductibility, says Tracey McLeod. Photo / 123rf
Flaws in approach to rental homes
There are fundamental flaws in the Government's tax changes on rentals with non interest deductibility.
When home loan interest rates increase, rents will increase, less rental stock will be available when owning rentals is unaffordable, which will increase the number of homeless. It will also
increase the dependency on government for superannuation and accommodation grants as landlords exit the market, instead of being self-sufficient in their retirement.
Apparently building costs are not only set to rise with the shortage of materials and labour, the Government is set to change the R values of houses to unpractical levels with their three proposals to increase those levels. Some building materials or systems are not even available in New Zealand to meet those new levels. Aluminium joinery for example may become redundant as it may not meet the new R level requirement. So while the Government is promoting new builds as rental investments it is making it more expensive to build. What will the rents be then for the return on an expensive new build investment? Much higher than a currently fully renovated, second hand healthy home?
Tracey McLeod, Lake Tarawera
What will you do
Headline: 75 per cent of surveyed believe we are not doing enough to counter climate change. What they really mean is build me more roads and car parks so I can continue driving my huge gas-guzzling SUV and everyone else can ride your bikes and use the buses. The survey should have asked what steps will YOU take to reduce your carbon emissions.
Vince West, Milford
Payback time
Grant Dalton is a great poker player "and plays the country like a violin". If the next America's Cup is held in another country do the New Zealand ratepayers and taxpayers get their $100,000,000-plus interest back for paying to hold the last cup? It might be long overdue for the billionaire challengers to pay all the costs for holding the event.
Bruce Tubb, Belmont
