KEY POINTS:
Lifting the top tax rate to 39c may have boosted investment housing, to the disadvantage of potential homeowners, a report from the Department of the Prime Minister and Cabinet says.
And it says the value of a median-priced house increases by $25,000 for an investor able to deduct losses from rental properties compared to a potential homeowner who needs a large mortgage to buy the same house.
The report is by the House Prices Unit, set up within the Department of the Prime Minister and Cabinet to work on housing affordability polices.
Prime Minister Helen Clark last month outlined major plans involving private sector and public co-operation to increase the housing supply.
Research by the unit says a number of elements of the tax system directly affect the housing sector including the ability to deduct losses on investor rental housing.
Housing Minister Maryan Street said last night through a spokeswoman there was no political will in Parliament to change the present tax structure in regard to housing.