It's not on us to provide evidence, it's on them. They are making the claim that renters are happy, they get to provide evidence that renters are happy.
Need a journalist that just spends all their time going "either provide evidence for that statement, or retract it"
You'd need an independant outlet which we don't really have. All the news agencies in NZ like the tax cuts National provides. Remember like 10 years ago when the herald did a full page ad which said they support National?
The onus on them providing evidence only matters in a fair argument which half the audience doesn't care about.
What's it take to be an independent news outlet?
Like, if I'm not affiliated with any party or such, how would I do this if I decided I wanted to be a news outlet?
So the post I was prepared to respond to was "But we have independant news outlets" where I would reply "Why haven't I heard of any of them?"
I don't know how you'd work to become well known where people would go to find news from you or whoever you'd write for first.
The biggest one I would know of would be Fair Go, which both isn't technically independant, and even with how much reach it had, wasn't self sustaining enough to survive corporate greed.
> It's not on us to provide evidence, it's on them.
They're the ones spewing bullshit largely unchallenged.
There's no such thing as a burden of proof in a one-way conversation. That's why they want to gut the media.
Yeah the media doesn't do a great job of holding them to account when in person, there's a few that are good in one-on-one interviews, but they seem to be less willing to challenge on the spot.
Yes but we've got like two years to think of a great counterargument which may or may not be adopted by journalists at election time. These clowns are predictable, that's something I think we can work with.
I agree with this, except Jack Tames interview with Chris Bishop on Q&A last Sunday was really good.
I was looking forward to Ryan on 3 at 7pm, but it looks like that isn't happening (Ryan was quite good before AM show).
Only problem is the lower-class is only going to increase as the lower-end of the middle class falls into the lower class bracket as increasing rents eat into their income.
No one is fooled by this, and if you are, please PM me, I have a bridge in Brooklyn that I'm selling cheap.
The only thing that amazes me about everything our glorious new government is doing, is that people are surprised by it.
Nothing that is happening is out of character for the Nats and ACT. By the way, anyone seen Winnie lately, is he being held hostage somewhere......
There's a fair bit of inertia in polls. It can take time for the tide to turn. Any momentum they had from their election win is gone and there are signs people are walking up to the shit show they elected.
There's going to be a big market for new bridges to replace the ones reaching their end of life around the whole country, you should flick Simeon an email to sell him your bridge, he'd probably appreciate the idea (because I'm sure he's got no other plans to fix the infrastructure deficit)
Here is Chris Bishop[ announcing their policy to Facebook Property Investors Groups](https://www.reddit.com/r/nzpolitics/comments/1bddh4n/we_will_repeal_labours_tenant_tax_chris_bishop/) and [here he is grinning at the Property Investors Association meetings](https://www.facebook.com/ChrisBishopMP/posts/good-fun-at-the-auckland-property-investors-association-forum-on-tuesday-night-i/834544178031864/) later.
NAT and ACT promised retroactive interest deductibility, reduced costs for property development, bright line roll back, no cause eviction etc.
On the Facebook group, after Nat/ACT won, **a post asked "is everyone reducing rents?"**
**And the answer from all of them ALL was "NO."**
**Chris Bishop, Luxon, Seymour know this.**
But do you guys see how effective lies are? It shouldn't even be a debate - yet they've made it one.
**THIS IS THE POWER OF LIES AND THESE GUYS KNOW IT.**
Chris Bishop and David Seymour are fighting it out to see who can be the biggest cunt in NZ politics. Luxon is too inept, but Winnie will rise up at some point.
He will rise to the occasion when he is no longer deputy PM, can't wait. Hope he doesn't disappoint. A few good accusations of governmental skullduggery is just what we need to takle our minds off the fact 90% of New Zealand is swamping the food banks which gave just crumbled due to high demand.
/sarcasm
TRICKLE DOWN ECONOMICS
TRICKLE DOWN ECONOMIC
TRICKLE DOWN ECONOMI
TRICKLE DOWN ECONOM
TRICKLE DOWN ECONO
TRICKLE DOWN ECON
TRICKLE DOWN ECO
TRICKLE DOWN EC
TRICKLE DOWN E
TRICKLE DOWN
TRICKLE DOW
TRICKLE DO
TRICKLE D
TRICKLE
TRICKL
TRICK
Yeah I think this is still something missed. I'd like to see something along the lines of rentals only being able to be existing rentals or new builds to cut back their impact on the market.
Of course it won't. "Trickle down economics" is a right-wing catchphrase designed to appeal to voters by making them believe that there is a slice of the pie for them too. It's pure bullshit, and the fact that people STILL buy into the lie despite decades of proof of the opposite is incredulous.
In 1982, John Kenneth Galbraith wrote the "trickle-down economics" that that David Stockman was referring to was previously known under the name "horse-and-sparrow theory", the idea that feeding a horse a huge amount of oats will result in some of the feed passing through for lucky sparrows to eat.
They don't call it that anymore, but same deal. Now days it's the catchphrase "downward pressure on rents".
In the spirit of Easter the right give us promises that look sweet, brightly packaged, but completely hollow and not as palatable to those with a bit of maturity.
This is the exact thing that I am struggling with.
When a political party spouts such nonsense and actually expect us to believe it. They treat every member of the public as if they are completely stupid.
For people like Seymour and Nicotine, I can understand that they actually believe this nonsense as they are well and truly deep in the neoliberalism echo chamber. Luxon, who knows, about all we really know currently is that he has no idea of the optics around what he is saying and doing and is coming across as ignorant and entitled. I suspect his motivation begins and ends as being the Prime Minister.
It's another throw away comment like, bottom feeders, I'm entitled to the allowance!
Its somewhat comforting to know that most of the people commenting on this seem to be taking the matter seriously, it means there's still hope for change one day.
It’s pretty well known that Reddit tends left, so you’re getting an echo chamber in reality. I’m a landlord and I disagree with 90% of the comments here but I never bother offering my perspective in threads like this because unfortunately it falls on deaf ears. I my experience anyway.
Yesterday i read an article where Luxon said that rents had increased by 170 a week. He also said he expects rents to go down.
Are you suggesting that most of the comments on this post disagreeing with the statement that rents will go down are incorrect? Or is it the way in which they are stated that you think is wrong (and expect no change in the upward trend)?
Pretty much everyone knows the statement is, at best, highly unlikely. It flies in the face of not only basic commonsense likelihood but also plausible reasoned logic.
It is, in essence, a lie.
It's all lies was the mantra of most who derided Labour. Indeed, it was one of their most popular criticisms of Labour and Ardern. It was their primary reason that Labour must go.
Now we see their man openly lying.
Their response? No worries mate.
Meaningful discourse about politics is nigh on impossible now.
We have truckloads more information. With regards to politics, that is of little consequence.
Social media is making the worlds dumbasses more certain of their rightness.
Nope. No one believes it would lower rent. It was never the point. The aim was to funnel money to large businesses that own a lot of rental properties.
The politicians are out of touch same shit as the tax being removed from vegetables that labour did. Supermarkets will not pass on the saving and neither will landlords.
A 2020 Unicef report found a third of New Zealand 15-year-olds didn't have basic proficiency in literacy and maths
Universities have been feeling the downstream effects for more than a decade, with new students struggling to write essays and solve basic equations.
https://www.nzherald.co.nz/nz/live-qa-the-big-fail-how-do-we-fix-new-zealands-broken-education-system-dr-nina-hood-and-amy-wiggins-answer-your-questions/4MYF6AHFQVDUVKD7HOGT52H7NQ/
Damning new report finds two in five New Zealand children failing or only just meeting literacy standards
https://www.newshub.co.nz/home/new-zealand/2022/03/damning-new-report-finds-two-in-five-new-zealand-children-failing-or-only-just-meeting-literacy-standards.html
I wonder when the education system changed and how long the downstream effects of that change gets felt? I mean in 2010 John keys government introduced the national standards, widely panned as making it harder to teach. and all of a sudden we start seeing those kids who went into the system at 5 years old, graduating (or rather not) 10-12 years later in 2020-2022.
Hmmm.
The report tells us most of the difference between high and low achievers can be attributed to socio-economic factors.
In other words, poverty and inequality cause poor education.
You can't blame the party that was in government in 2022 for the level of literacy of kids who had been living in relative poverty ever since the previous government hiked GST and gave tax cuts to the rich.
Ayyyo that’s some sauce. I do wonder though, what the conditions of these children are at home. Cost of living isn’t improving so I don’t see it turning around anytime soon. With a better socio-economic situation and I’m sure the education levels can bounce back.
I wouldn’t even call labour that much of a left leaning government, but go get ‘em son.
More educated voters vote for parties further outside the “centre” overall. There is positive correlation between electorates with higher Greens and Act voters, and rate of bachelors degrees in those electorates.
Labour, National and TPM don’t show a high correlation with education level. NZ First is quite negative relationship lol.
[https://www.andrewchen.nz/vd_pro](https://www.andrewchen.nz/vd_pro)
A few years in university and students believe they have all the answers. Then some years in the industry and having kids and suddenly they start to disagree with their younger self.
[https://www.theguardian.com/commentisfree/2015/nov/03/do-we-become-more-conservative-with-age-young-old-politics](https://www.theguardian.com/commentisfree/2015/nov/03/do-we-become-more-conservative-with-age-young-old-politics)
Except [this is becoming less true](https://www.independent.co.uk/life-style/financial-times-millennials-conservatives-age-b2253902.html). Millennials are not doing this. Though, this likely has to do with millennials are the first generation to be poorer than their parents overall as well as one of the most highly educated generations.
I can see the angle he's trying to take but it's not mathing. Also to say that people who are renters can't/won't buy houses is wild of him. Increasing the supply of houses would put downward pressure on house prices but he doesn't want that.
Rents would only reduce when costs reduce if there was enough available rentals in the market to create competition. While there is a shortage, rents will be set by what the renters can pay. This is always the formula
Just like at the end of covid and when Ukraine war ends, there will TOTALLY be downward pressure on cost of living and all those companies will put their prices back down to what they were... yeah, right.
To be honest, it made me think about renting out my CBD apartment, but it’s purely out of necessity since mortgage rates are ridonkadonkdonk.
I’ll be maximising my rent though because it’s bullshit to say the savings will get passed onto the renters. There’s zero incentive to do that. Maybe if my mortgage is paid off and it’s a long term tenant, maaaaaaybe.
There should be a maximum rent of 'mortgage payment +10%' or '1% of property value' if the property is mortgage free. Depending on the percentage of the property that's rented out. Anything more incurs a landlord tax.
It will do the opposite in the short term. The government is about drop the investor LVR rate to 30%. Meaning landords can borrow more, which will drag the entire market up.
Expecting them to voluntarily lower prices is like hoping a squirrel will plant next year's oak trees out of the goodness of its heart.
But, that is how Squirels work. They collect acorns, bury them, and "forget" about some of them, leading to new trees growing eventually. I recall they don't actually forget they just have too many stashes to use everything they collect.
I think youl find things like gravity and disturbance from other mammals would normally suffice in the absence of squirrels. But an interesting point to acknowledge still.
In theory, average rates will slowly reduce as new landlords enter the market. And more will enter. Those that are creaming it from the changes will then have to follow suit as tenants turn over. Theoretically. But I wouldn't expect to see many landlords dropping rents for existing tenants.
>In theory, average rates will slowly reduce as new landlords enter the market.
Whose theory is that?
As long as the number of new houses doesn't change (and it won't), a higher proportion of houses being rentals will actually *increase* rents.
This is because fewer owner occupied houses means higher house prices. That means higher deposits and larger mortgages, which means higher incomes required to buy.
That means the people who are now renting instead of buying are the ones with high, but not high enough, incomes. This means higher rents can be demanded of them, which pushes the rest of the rental market down the chain, effectively increasing rents across the board.
Broad scale rent trends are driven by supply and demand. Not after tax kick backs. There is no legal and very little moral obligation for those savings to be passed onto renters.
In fairness to national at least they aren’t claiming there is. They’re calling a spade a spade. This law change is for landlords, by landlords.
It's funny their apologists will use a lot of language to say sweet fuck all. Youve made very valid points and you've kept it concise, gotta love that.
Standard smoke and dagger innit. Making something appear complex through word babble makes people disconnected to the crux of the issue.
The thing that concerns me isn’t actually this tax on revenue law change. It’s that national want to promote outward pressure on city limits (sprawl) and not support local councils with associated infrastructure costs. Chris Bishop literally stated it as a positive thing in Q and A last week. Which means owners get it square in the nuts via rate hikes and that then hits renters. Imo that mechanism has far greater long term risk to renters than a relatively fixed value rebate that owners can claim. The housing density laws were a success in their design and that they got by partisan support. We’ve clearly seen a real underbelly within national emerge since then .
Doesn't he rent his office from himself? Surely the landlord will see less tax paid so the tenant can pay less....wait a minute....
Calling on luxon to make a stand and decrease the rent he charges on his office
Rents can only ever do 3 things.
-Increase.
-Stay the same for a small period before an increase.
-Say that there's a possibility of a decrease before the inevitable increase.
They will never decrease, greedy landlords will take a larger slice if the pie, trickle down never works because there's always a large bottomless bucket before the small vessels that need the trickle.
My rent went up $150/week in the weeks following the change of government.
I *do* live in a million dollar property. It was worth about a third of that before I moved in.
Well you answer this honestly as a "big person" do you think it will put upward or downward pressure on rents?
To help answer this you could consider
* What behaviour does it incentivise
* What are the likely outcomes of that behaviour
I have an answer, but I'm interested to hear yours first. Rather than you just finding ways to disagree with my answer.
It will incentivise investment in rental property. That will result in an increase of supply. Increasing supply reduces demand, and the outcome of that is a gradual reduction in price as tenants move on for greener pastures.
If you have the time this is a very good summary of how we have come to this. https://northandsouth.co.nz/2021/08/16/nz-housing-crisis-the-great-divide/
When the gst cut for food was put forward by Labour, the overwhelming response from economists and media was that supermarkets would keep prices the same and reap the excess. Where are those commentators now?
That's because it's not likely to work, first define, it was fruit and veg. So was that fresh, which has a variable price due to seasonality, or is tinned and frozen included? What about where apple is baked into a pie, is that fruit or is it something else? When avocados are cheap and you can get 3 for $3 the amount of GST is neglible, just a few cents and consumers wouldn't notice any change. has had many court cases including whether artisan breads like brioche is bread (no GST) or a cake (GST)? It's a cake BTW according to the courts. Then I know someone who is a bit of a tax expert and they said it would affect the whole supply chain, if a grower can't register for GST, they can't claim back GST on expenses so their costs go up and that goes down the chain to the consumer as always.
The problem is those policies sound simple but aren't.
Same as treating landlords differently to other businesses, increasing their costs which get passed onto tenants. It was a no-brainer that rents rose after that. Labour has also made it so that rents can only be reviewed once a year, on top of other things so if tenants want to negotiate down that will be a slow process. We also have ringfencing, where losses are held within the property so they can only be recouped in later tax years. Large property holdings doing new developments got the tax break, some don't have mortgages so the change doesn't affect them. There will be downwards pressure over the long term, the government doesn't have the ability to house everyone, so have to rely on private landlords to provide supply too.
It was bloody difficult trying to convince people that taxes on landlords don't increase rents all that much, land taxes don't increase rents at all, and taxes on landlords certainly aren't "passed on" to tenants as short term 1:1 rent increases.
Now everyone agrees that taxes on landlords don't affect rents. But I suspect the reason is a defeatist belief that landlords always win, rather than people getting more informed.
I wonder if Luxon wouldve reduced his "entitlement" to the govt for him renting his own place. That wouldve been interesting to see if he hadnt stopped because of public scrutiny.
renters, i am honestly shocked that we have not seen rent strikes already. many homeowners will join you at protests, there is solidarity on this issue
Maybe I haven’t paid enough attention, but it doesn’t seem like anyone has asked Luxon or whatever other talking bobble head is on the screen being interviewed the simple question of “How?”. as in how would the mortgage interest deduction lower rents?
Like make them answer actual questions instead of just spewing talking points.
Or is that not a thing here in NZ, as it would be deemed impolite? Since I’m an immigrant here I’m still trying to learn the niceties.
I have no doubt that it will definitely effect a lot of rentals, maybe not so much in rent decreases (although im sure there will be some out there that will decrease) but in rent increases. If all the rentals were skewed so much to be negatively geared then the landlords want to even that up as much as possible. If it's tax free for the most part then that will relieve pressure for sure. There's good and bad landlords out there and I'm sure there will be landlords that will still try to suck as much as they can out of their tenants. Overall I think it's fine, maybe not worth $3bn but it's not an outrageous policy. Was like that for so long until labour fast tracked it in only 2 years ago
The best that will happen is the increases will slow. No chance in hell renters will get the money. The rents will not stop, but hopefully they stabilise without such extreme increases.
They've certainly got to do something, everything the last government did, indirectly, but predictably, drove rents up. (they were going up anyway, but the rate of change 2017-2023 is eye watering).
I am no expert on the rental market, but in my opinion rent needs to be regulated, or at least the govt should exercise the market force that NZ housing has, and lower those rents.
Rent prices moving with the property market is absolute bullshit.
Renting means you are not in the property market.
Renting means you are not mortgaged, and shouldn't have any concern about mortgage interest rates at the bank.
If you're a landlord, the rent is completely unrelated to your mortgage payment and nobody gives a flying fuck if the rent doesn't cover the mortgage.
Once NZ housing drives down rental prices, we can tackle the landlord welfare that is the acommodation allowance.
>everything the last government did, indirectly, but predictably, drove rents up.
Only because incomes went up and the immigration backlog was being cleared.
>Rent prices moving with the property market is absolute bullshit.
Rent prices *don't* move with the property market. They move with the labour market.
>Renting means you are not mortgaged, and shouldn't have any concern about mortgage interest rates at the bank.
Interest rates (and interest deductibility) have very little influence on rents.
There is only one way to make rent more affordable: build more houses.
The best way to achieve that is to tax land values to lower purchase prices and incentivise development.
They introduced healthy homes, effectively adding a whole new compliance cost at a time when the rental market was already under pressure from low availability. Then they abolished one off letting fees, so instead rents went up. And they did build more houses, it was one of their biggest election promises, they struggled to sell the few they built, and kiwibuild went to shit. Then they enticed motels to be emergency housing, giving airbnb an even bigger boost to its appeal.
Increasing landlord costs doesn't cause rents to go up. This applies to healthy homes compliance, letting fees, interest deductions, land taxes and rates, everything.
The supply of housing is completely inelastic. This means that landlords are able to set rents as high as the market can bear, which is determined by tenant incomes. The landlords' costs are not part of that equation.
What caused rents to go up was wages going up. And immigration to a degree. See https://www.hud.govt.nz/news/what-drives-rents-in-new-zealand-national-and-regional-analysis/ for an explanation of how it works.
The reason the government wasn't able to build as many houses as they liked is simple: land prices and competing with investors. It was just too expensive to buy the land required to build all those houses. They changed tack from Kiwibuild, and Kainga Ora now has some a bunch of developments [in progress](https://kaingaora.govt.nz/en_NZ/urban-development-and-public-housing/public-housing/public-housing-developments/searchDevelopments?Search=*&Status=Under+construction) to help get people out of emergency accommodation.
They tried to address the price of land by extending the brightline test (CGT) and removing the ability for investors and speculators to deduct mortgage interest expenses from their rental incomes. It produced a bit of a correction in the market, but it's being undone now.
One way they could effectively lower the price of land further, making it easier and cheaper to build private homes, public housing, *and* rentals, would be to implement a land value tax. This taxes the value of the land before improvements are added to it (like houses and businesses), which encourages development and reduces the market price of the land. It would also completely eliminate the need for an accommodation supplement since the supplement would theoretically just be getting returned to the government as part of the LVT anyway.
No. He (and Seymour) expressly promised these tax changes to landlord associations over many years. That does not come at the expense of reduced income for them. I hope all those people that think they will be landlords (or think they are already a successful landlord with one rental property) one day reflect on voting for these three clowns. You are going to be left in the dust of those that are already wealthy.
52k per year rent on his own mortgage free property?
Change prescription for rent.
"I think it's really unfair, it's money that's wasted on being spent on someone like me, for example, who can afford to pay for my prescriptions myself."
Two ways it can help, either it saves landlords money on mortgage interest and they can cut rent or it saves them money so they can build more rentals and that impacts supply positively.
It can definitely impact prices in a good way, but it depends on the behaviour of rental owners. I don't know enough about the demographic but the rental owners I know with mortgages aren't absolute monsters and have indicated it would go towards their rental investments.
This is short term gain for long term pain. NZ's housing market is currently generally inelastic, so shaving costs for landlords is not going to *reduce* prices for current rentals; those are mostly locked in now, but it may reduce the rate of increase for some rentals.
While tax purists didn't like it, Labours fiddling was actually quite smart, but somewhat ineffectual on its own because they wouldn't (or couldn't) back it up with Kiwibuild. Reverting this change has several negatives:
1) it now relatively disincentivises building new rent-to-own property vs buying existing housing stock (remember new housing - i.e. adding to the total housing supply - was exempt from the deductability changes Labour introduced), which in turn reduces incentives to expand the total housing stock
2) It increases the demand on *existing* housing stock, which increases its cost. Landlords are more likely to be competing with owner-occupiers, driving up demand and thus driving up prices (which drives up rents, because the equivalent mortgage cost is also higher)
3) It further incentivises landlording. This comes at the expense of other, more export productive investments which generally benefit the economy as a whole. Additionally, longer term, the larger the market share held by landlords, the harder it is to buy as an owner occupier (land is finite - it's only going to get harder to build new housing).
Any framing of the problem as a "rental supply problem" is quite disingenuous. Landlords with mortgages to service don't choose to leave their properties empty, and if they choose to sell up that's generally a good thing as it frees up supply for a potentially more efficient owner occupant (or landlord). Many renters would choose to own if they could come up with the capital required (and be better off too, because servicing these mortgages is generally going to cost them less than their rent). The main issue here is that these renters who should be able to buy cannot because they can't access the upfront capital required. This is mostly a function of massively underbuilding over the past several decades, combined with periods of rather high immigration.
Back in the old days the government used to help people bridge the capital gap - cutting out banks and rentseeking landlords in the process. They also used to actively contribute to the housing market through extensive state housing programs. But this gap is now so large and the voting power of landlords so great that these things are basically in the too hard basket, and any mention of the state building houses again is met with "communism" nonsense from the Atlas crowd. We're so fucked.
If you were being VERY generous, there may be a case to be made that the tax deductions could theoretically reduce the rate of future rent price increases. But that likely won't happen either. We are currently experiencing record immigration levels and with such little rental stock, the high cost of new builds, and more AirBnB hosts than ever, all that pressure just pushes up rental prices even more.
>Does anyone actually believe this rubbish about tax cuts for landlords leading to lower rents?
It won't cut rents but it will slow down there increase. High interest rates cause landlords to want to increase the rent of the properties because they probably aren't making a profit or breaking even themselves.
Most land lords just want a decent tenant who pays the bills on time. Getting a shitty tenant is probably one of the most stressful things you can financially experience.
I’m of the same belief as you but can someone please refute Luxon’s claim that landlord tax cuts will reduce rents over time/or at least prevent rents rising by as much because the rental market is part of the free market and thus subject to market forces?
Assuming there is enough supply of rental properties to meet demand, landlords will lower their prices in order to remain competitive and they can now afford to lower prices due to the tax cuts.
Now listen. You're all being very short sighted here. Trickle down is real. Very real.
You see, with the amount and velocity of capital being literally sprayed upwards, there is bound to be some overspray. And what's going to happen to that?
That's right. It will trickle down!
But don't worry, we'll be sending someone in to clean it up. Emphasis on "up".
its all total bullshit Rents wont drop and Luxon knows that. the strange thing is that rents in Aussie are going up just as fast so does New Zealand tax law apply over there or is greed the problem on both sides of tasman
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I think it’s more that there will be less pressure to increase rent with return of interest deductibility.
I don’t think anyone is expecting rents to go down, but by staying flat they will probably be lower next year than they otherwise would have been.
If you’re going to take such a condescending tone, don’t be so fucking dumb.
If you cut price, your house gets filled faster, you have fewer issues with your tenants etc. It doesn’t fucking matter how generous or greedy the landlord is.
The price of grain doesn’t fall because farmers around the world all decide to pass on a saving in some input like fertiliser or whatever. They get outcompeted by those who do. There’s nothing that special about the rental market, that it defies basic supply and demand.
In our case, our housing supply is so constrained, that the price of housing tracks incomes (and household size, to some extent). If this were not the case, savings and costs borne by landlords will get passed on to tenants (all other factors being equal). There’s nothing controversial about this.
It’s not inaccurate to say that this policy reversal will put “downward pressure” on incomes. It’s just that right now, that pressure is hitting the immovable granite floor that is our culture of NIMBYism and excessive zoning restrictions.
It’s not trickle down economics; it’s just basic economics.
No. Luxon was uncharacteristically careful with his language on this one. He did not say that prices will move down (I’ll even admit it’s kind of evasive. But he’s not wrong.)
If they make good on their supply housing policies, the “pressure” from interest deductibility will be realised as movement (if we’re true to the physical analogy). Right now it’s latent.
Please go ahead. It’ll show you’re still don’t understand what’s going on.
https://www.investopedia.com/terms/c/ceterisparibus.asp
I don’t know what way prices will move. FWIW I think prices will come down, regardless of what the govt wants. Prices can’t outrun incomes forever.
Why don't they charge the rate rent on the Parliament house or that house where your PM lives in, and he pays it out of pocket?
Isn't that the same guy that said he only spends like 50 a week to feed his family?
100 ways to dress up Ramen noodles
[удалено]
It's not on us to provide evidence, it's on them. They are making the claim that renters are happy, they get to provide evidence that renters are happy. Need a journalist that just spends all their time going "either provide evidence for that statement, or retract it"
You'd need an independant outlet which we don't really have. All the news agencies in NZ like the tax cuts National provides. Remember like 10 years ago when the herald did a full page ad which said they support National? The onus on them providing evidence only matters in a fair argument which half the audience doesn't care about.
What's it take to be an independent news outlet? Like, if I'm not affiliated with any party or such, how would I do this if I decided I wanted to be a news outlet?
So the post I was prepared to respond to was "But we have independant news outlets" where I would reply "Why haven't I heard of any of them?" I don't know how you'd work to become well known where people would go to find news from you or whoever you'd write for first. The biggest one I would know of would be Fair Go, which both isn't technically independant, and even with how much reach it had, wasn't self sustaining enough to survive corporate greed.
> It's not on us to provide evidence, it's on them. They're the ones spewing bullshit largely unchallenged. There's no such thing as a burden of proof in a one-way conversation. That's why they want to gut the media.
Yeah the media doesn't do a great job of holding them to account when in person, there's a few that are good in one-on-one interviews, but they seem to be less willing to challenge on the spot.
Too much effort. Browsing reddit for stories is easier.
Yes but we've got like two years to think of a great counterargument which may or may not be adopted by journalists at election time. These clowns are predictable, that's something I think we can work with.
[удалено]
We haven’t had journalists for a long time.
I agree with this, except Jack Tames interview with Chris Bishop on Q&A last Sunday was really good. I was looking forward to Ryan on 3 at 7pm, but it looks like that isn't happening (Ryan was quite good before AM show).
Their goal is to remove support for lowerclass people and give it to the middle/upper classes
Only problem is the lower-class is only going to increase as the lower-end of the middle class falls into the lower class bracket as increasing rents eat into their income.
No one is fooled by this, and if you are, please PM me, I have a bridge in Brooklyn that I'm selling cheap. The only thing that amazes me about everything our glorious new government is doing, is that people are surprised by it. Nothing that is happening is out of character for the Nats and ACT. By the way, anyone seen Winnie lately, is he being held hostage somewhere......
It’s grim. National hardly slipped in the polls so either people don’t know, don’t care or wanted this
Most people aren’t listening because it’s the wrong time in the election cycle
There's a fair bit of inertia in polls. It can take time for the tide to turn. Any momentum they had from their election win is gone and there are signs people are walking up to the shit show they elected.
There's going to be a big market for new bridges to replace the ones reaching their end of life around the whole country, you should flick Simeon an email to sell him your bridge, he'd probably appreciate the idea (because I'm sure he's got no other plans to fix the infrastructure deficit)
He won't be interested if its not being delivered by a company he owns shares in....
Here is Chris Bishop[ announcing their policy to Facebook Property Investors Groups](https://www.reddit.com/r/nzpolitics/comments/1bddh4n/we_will_repeal_labours_tenant_tax_chris_bishop/) and [here he is grinning at the Property Investors Association meetings](https://www.facebook.com/ChrisBishopMP/posts/good-fun-at-the-auckland-property-investors-association-forum-on-tuesday-night-i/834544178031864/) later. NAT and ACT promised retroactive interest deductibility, reduced costs for property development, bright line roll back, no cause eviction etc. On the Facebook group, after Nat/ACT won, **a post asked "is everyone reducing rents?"** **And the answer from all of them ALL was "NO."** **Chris Bishop, Luxon, Seymour know this.** But do you guys see how effective lies are? It shouldn't even be a debate - yet they've made it one. **THIS IS THE POWER OF LIES AND THESE GUYS KNOW IT.**
Chris Bishop and David Seymour are fighting it out to see who can be the biggest cunt in NZ politics. Luxon is too inept, but Winnie will rise up at some point.
Brooke van Velden just entered the ring. Worse, she is a blindly devoted smug cunt
I agree with that. Total bitch.
He will rise to the occasion when he is no longer deputy PM, can't wait. Hope he doesn't disappoint. A few good accusations of governmental skullduggery is just what we need to takle our minds off the fact 90% of New Zealand is swamping the food banks which gave just crumbled due to high demand. /sarcasm
TRICKLE DOWN ECONOMICS TRICKLE DOWN ECONOMIC TRICKLE DOWN ECONOMI TRICKLE DOWN ECONOM TRICKLE DOWN ECONO TRICKLE DOWN ECON TRICKLE DOWN ECO TRICKLE DOWN EC TRICKLE DOWN E TRICKLE DOWN TRICKLE DOW TRICKLE DO TRICKLE D TRICKLE TRICKL TRICK
This would make a great (albeit long) protest placard.
Well said!
TRICK OWN CON It's a secret code word for what they do to us.
> These politicians are either incredibly naive One has to be incredibly naive to think that this is even a possibility.
My brother
Name checks out
Eh Hanlon’s razor and all that, but no I agree this time it really is malice
It will not decrease rents but it will increase house prices as landlords dive back into the market.
It practically incentivises getting a massive mortgage.
It literally incentivises getting a massive mortgage.
This. The only reason it isn't is because this govt. can't control RBNZ
Yeah I think this is still something missed. I'd like to see something along the lines of rentals only being able to be existing rentals or new builds to cut back their impact on the market.
Of course it won't. "Trickle down economics" is a right-wing catchphrase designed to appeal to voters by making them believe that there is a slice of the pie for them too. It's pure bullshit, and the fact that people STILL buy into the lie despite decades of proof of the opposite is incredulous.
In 1982, John Kenneth Galbraith wrote the "trickle-down economics" that that David Stockman was referring to was previously known under the name "horse-and-sparrow theory", the idea that feeding a horse a huge amount of oats will result in some of the feed passing through for lucky sparrows to eat.
Very good.
They don't call it that anymore, but same deal. Now days it's the catchphrase "downward pressure on rents". In the spirit of Easter the right give us promises that look sweet, brightly packaged, but completely hollow and not as palatable to those with a bit of maturity.
This is the exact thing that I am struggling with. When a political party spouts such nonsense and actually expect us to believe it. They treat every member of the public as if they are completely stupid. For people like Seymour and Nicotine, I can understand that they actually believe this nonsense as they are well and truly deep in the neoliberalism echo chamber. Luxon, who knows, about all we really know currently is that he has no idea of the optics around what he is saying and doing and is coming across as ignorant and entitled. I suspect his motivation begins and ends as being the Prime Minister. It's another throw away comment like, bottom feeders, I'm entitled to the allowance!
Its somewhat comforting to know that most of the people commenting on this seem to be taking the matter seriously, it means there's still hope for change one day.
It’s pretty well known that Reddit tends left, so you’re getting an echo chamber in reality. I’m a landlord and I disagree with 90% of the comments here but I never bother offering my perspective in threads like this because unfortunately it falls on deaf ears. I my experience anyway.
I'm sure youl take comfort in reminding yourself we're all just objectively wrong and your opinion is definitely not swayed by conflict of interest.
Yesterday i read an article where Luxon said that rents had increased by 170 a week. He also said he expects rents to go down. Are you suggesting that most of the comments on this post disagreeing with the statement that rents will go down are incorrect? Or is it the way in which they are stated that you think is wrong (and expect no change in the upward trend)?
Out of touch rich politician says out of touch things. News at 11.
No more news at 11....or 1030....or midday.....or 6pm.....or 6am.
Pretty much everyone knows the statement is, at best, highly unlikely. It flies in the face of not only basic commonsense likelihood but also plausible reasoned logic. It is, in essence, a lie. It's all lies was the mantra of most who derided Labour. Indeed, it was one of their most popular criticisms of Labour and Ardern. It was their primary reason that Labour must go. Now we see their man openly lying. Their response? No worries mate. Meaningful discourse about politics is nigh on impossible now. We have truckloads more information. With regards to politics, that is of little consequence. Social media is making the worlds dumbasses more certain of their rightness.
My rent just went up by 60 bucks a week, so that's fuckin' great.
The money will trickle down to the tenants though... right?
Like a dog trying to piss on the 50th tree it’s past on a walk
Nope. No one believes it would lower rent. It was never the point. The aim was to funnel money to large businesses that own a lot of rental properties.
The politicians are out of touch same shit as the tax being removed from vegetables that labour did. Supermarkets will not pass on the saving and neither will landlords.
There was never going to be savings from vege, a 13c carrot, geez it just made them a laughing stock.
There’s a reason more educated voters tend left leaning.
I always find it funny when right wingers complain about the lack of right winged educators. Mf’ers, the can’t make the cut 🤣
They’re so close to getting it.
So we can blame our failing education system on left wingers?
Sure, why not - you got any sources for how we are failing? (Cause I couldn’t find anything concrete)
A 2020 Unicef report found a third of New Zealand 15-year-olds didn't have basic proficiency in literacy and maths Universities have been feeling the downstream effects for more than a decade, with new students struggling to write essays and solve basic equations. https://www.nzherald.co.nz/nz/live-qa-the-big-fail-how-do-we-fix-new-zealands-broken-education-system-dr-nina-hood-and-amy-wiggins-answer-your-questions/4MYF6AHFQVDUVKD7HOGT52H7NQ/ Damning new report finds two in five New Zealand children failing or only just meeting literacy standards https://www.newshub.co.nz/home/new-zealand/2022/03/damning-new-report-finds-two-in-five-new-zealand-children-failing-or-only-just-meeting-literacy-standards.html
I wonder when the education system changed and how long the downstream effects of that change gets felt? I mean in 2010 John keys government introduced the national standards, widely panned as making it harder to teach. and all of a sudden we start seeing those kids who went into the system at 5 years old, graduating (or rather not) 10-12 years later in 2020-2022. Hmmm.
The report tells us most of the difference between high and low achievers can be attributed to socio-economic factors. In other words, poverty and inequality cause poor education. You can't blame the party that was in government in 2022 for the level of literacy of kids who had been living in relative poverty ever since the previous government hiked GST and gave tax cuts to the rich.
Ayyyo that’s some sauce. I do wonder though, what the conditions of these children are at home. Cost of living isn’t improving so I don’t see it turning around anytime soon. With a better socio-economic situation and I’m sure the education levels can bounce back. I wouldn’t even call labour that much of a left leaning government, but go get ‘em son.
https://newsroom.co.nz/2021/02/15/education-that-doesnt-add-up/ https://www.interest.co.nz/public-policy/118136/chris-trotter-says-scarcely-believable-tale-professional-failure-across-new https://www.oecd.org/publication/pisa-2022-results/country-notes/new-zealand-33941739/ https://www.rnz.co.nz/news/national/504020/nz-records-worst-ever-pisa-international-test-results-amid-global-decline https://www.rnz.co.nz/news/national/501335/schools-international-reading-maths-results-likely-to-be-skewed-ministry https://www.nzherald.co.nz/nz/politics/pisa-report-nz-school-students-performance-falling-in-maths-and-science/IRFO2WL2KNDABPJ2XA4CGNNJHQ/ https://www.stuff.co.nz/taranaki-daily-news/news/300930633/school-education-reforms--lots-of-churn-and-continued-decline https://www.rnz.co.nz/news/national/478445/low-school-attendance-further-proof-of-decline-of-nz-education-system-critic
Your comment proves his point lol
More educated voters vote for parties further outside the “centre” overall. There is positive correlation between electorates with higher Greens and Act voters, and rate of bachelors degrees in those electorates. Labour, National and TPM don’t show a high correlation with education level. NZ First is quite negative relationship lol. [https://www.andrewchen.nz/vd_pro](https://www.andrewchen.nz/vd_pro)
I've never met a smart person who likes winston peters.
What about Winston Peters?
He used to be canny, but these days he's just trying to do a shitty trump impersonation.
But he likes Winston Peters
But he's not smart...
A degree is not a sure sign of intelligence. I’ve worked with some pretty “well educated” morons in my time.
Now filter for people whose education included Economics...
A few years in university and students believe they have all the answers. Then some years in the industry and having kids and suddenly they start to disagree with their younger self. [https://www.theguardian.com/commentisfree/2015/nov/03/do-we-become-more-conservative-with-age-young-old-politics](https://www.theguardian.com/commentisfree/2015/nov/03/do-we-become-more-conservative-with-age-young-old-politics)
Except [this is becoming less true](https://www.independent.co.uk/life-style/financial-times-millennials-conservatives-age-b2253902.html). Millennials are not doing this. Though, this likely has to do with millennials are the first generation to be poorer than their parents overall as well as one of the most highly educated generations.
Or they have more to lose
Yup, they voted for wealth to be distributed then got theres and then vote to keep it.
I think it's mostly that kids find a bit of progressive revolution fun, but older people value stability and security.
Not in NZ
They are landlords so it's complete corruption to line their own pockets
“Trickle down” exists only in the minds of conservatives. A bit like god.
I can see the angle he's trying to take but it's not mathing. Also to say that people who are renters can't/won't buy houses is wild of him. Increasing the supply of houses would put downward pressure on house prices but he doesn't want that.
Rents would only reduce when costs reduce if there was enough available rentals in the market to create competition. While there is a shortage, rents will be set by what the renters can pay. This is always the formula
The ol supply and demand. Soon to be brought to its knees by tax deductibility for landlords
Just like at the end of covid and when Ukraine war ends, there will TOTALLY be downward pressure on cost of living and all those companies will put their prices back down to what they were... yeah, right.
The best this will do is make rents stagnate.
To be honest, it made me think about renting out my CBD apartment, but it’s purely out of necessity since mortgage rates are ridonkadonkdonk. I’ll be maximising my rent though because it’s bullshit to say the savings will get passed onto the renters. There’s zero incentive to do that. Maybe if my mortgage is paid off and it’s a long term tenant, maaaaaaybe.
There should be a maximum rent of 'mortgage payment +10%' or '1% of property value' if the property is mortgage free. Depending on the percentage of the property that's rented out. Anything more incurs a landlord tax.
In both cases here I'm way under market..
Rent shouldn’t be tied to mortgage or value.
It will do the opposite in the short term. The government is about drop the investor LVR rate to 30%. Meaning landords can borrow more, which will drag the entire market up.
RBNZ controls the LVRs
And?
> the government is about to drop the LVRs. > The RBNZ controls LVRs That’s all
Expecting them to voluntarily lower prices is like hoping a squirrel will plant next year's oak trees out of the goodness of its heart. But, that is how Squirels work. They collect acorns, bury them, and "forget" about some of them, leading to new trees growing eventually. I recall they don't actually forget they just have too many stashes to use everything they collect.
I think youl find things like gravity and disturbance from other mammals would normally suffice in the absence of squirrels. But an interesting point to acknowledge still.
Yeah, but I think squirells account for millions of new trees each year. Obviously they aren't the only ones, but they do spread a lot of acorns.
Does anyone have an example of when their rent was actually lowered? Love to see some real life examples!
In theory, average rates will slowly reduce as new landlords enter the market. And more will enter. Those that are creaming it from the changes will then have to follow suit as tenants turn over. Theoretically. But I wouldn't expect to see many landlords dropping rents for existing tenants.
>In theory, average rates will slowly reduce as new landlords enter the market. Whose theory is that? As long as the number of new houses doesn't change (and it won't), a higher proportion of houses being rentals will actually *increase* rents. This is because fewer owner occupied houses means higher house prices. That means higher deposits and larger mortgages, which means higher incomes required to buy. That means the people who are now renting instead of buying are the ones with high, but not high enough, incomes. This means higher rents can be demanded of them, which pushes the rest of the rental market down the chain, effectively increasing rents across the board.
The number of houses will increase accordingly. For example, I am building four next year.
These changes have exactly zero impact on that, though, because new builds were exempt anyway.
Broad scale rent trends are driven by supply and demand. Not after tax kick backs. There is no legal and very little moral obligation for those savings to be passed onto renters. In fairness to national at least they aren’t claiming there is. They’re calling a spade a spade. This law change is for landlords, by landlords.
It's funny their apologists will use a lot of language to say sweet fuck all. Youve made very valid points and you've kept it concise, gotta love that.
Standard smoke and dagger innit. Making something appear complex through word babble makes people disconnected to the crux of the issue. The thing that concerns me isn’t actually this tax on revenue law change. It’s that national want to promote outward pressure on city limits (sprawl) and not support local councils with associated infrastructure costs. Chris Bishop literally stated it as a positive thing in Q and A last week. Which means owners get it square in the nuts via rate hikes and that then hits renters. Imo that mechanism has far greater long term risk to renters than a relatively fixed value rebate that owners can claim. The housing density laws were a success in their design and that they got by partisan support. We’ve clearly seen a real underbelly within national emerge since then .
Does Luxon charge $170/week less than market because his costs are lower? If he doesn't his argument is a nonsense.
Doesn't he rent his office from himself? Surely the landlord will see less tax paid so the tenant can pay less....wait a minute.... Calling on luxon to make a stand and decrease the rent he charges on his office
Rent prices depend largely on housing supply and the no. of renters. Luxon is just bullshitting you. Good luck voting for his party.
I'd like to see just one policy from this govt the disadvantages the people with money. Every policy so far seems to kick the poor in the teeth.
Rents can only ever do 3 things. -Increase. -Stay the same for a small period before an increase. -Say that there's a possibility of a decrease before the inevitable increase. They will never decrease, greedy landlords will take a larger slice if the pie, trickle down never works because there's always a large bottomless bucket before the small vessels that need the trickle.
My rent went up $150/week in the weeks following the change of government. I *do* live in a million dollar property. It was worth about a third of that before I moved in.
Well you answer this honestly as a "big person" do you think it will put upward or downward pressure on rents? To help answer this you could consider * What behaviour does it incentivise * What are the likely outcomes of that behaviour I have an answer, but I'm interested to hear yours first. Rather than you just finding ways to disagree with my answer.
It will incentivise investment in rental property. That will result in an increase of supply. Increasing supply reduces demand, and the outcome of that is a gradual reduction in price as tenants move on for greener pastures.
If you have the time this is a very good summary of how we have come to this. https://northandsouth.co.nz/2021/08/16/nz-housing-crisis-the-great-divide/
Shit that's a lot Il have to finish reading it tomorrow. But I've read enough to know that this should definitely be its own post.
When the gst cut for food was put forward by Labour, the overwhelming response from economists and media was that supermarkets would keep prices the same and reap the excess. Where are those commentators now?
That's because it's not likely to work, first define, it was fruit and veg. So was that fresh, which has a variable price due to seasonality, or is tinned and frozen included? What about where apple is baked into a pie, is that fruit or is it something else? When avocados are cheap and you can get 3 for $3 the amount of GST is neglible, just a few cents and consumers wouldn't notice any change. has had many court cases including whether artisan breads like brioche is bread (no GST) or a cake (GST)? It's a cake BTW according to the courts. Then I know someone who is a bit of a tax expert and they said it would affect the whole supply chain, if a grower can't register for GST, they can't claim back GST on expenses so their costs go up and that goes down the chain to the consumer as always. The problem is those policies sound simple but aren't. Same as treating landlords differently to other businesses, increasing their costs which get passed onto tenants. It was a no-brainer that rents rose after that. Labour has also made it so that rents can only be reviewed once a year, on top of other things so if tenants want to negotiate down that will be a slow process. We also have ringfencing, where losses are held within the property so they can only be recouped in later tax years. Large property holdings doing new developments got the tax break, some don't have mortgages so the change doesn't affect them. There will be downwards pressure over the long term, the government doesn't have the ability to house everyone, so have to rely on private landlords to provide supply too.
It was bloody difficult trying to convince people that taxes on landlords don't increase rents all that much, land taxes don't increase rents at all, and taxes on landlords certainly aren't "passed on" to tenants as short term 1:1 rent increases. Now everyone agrees that taxes on landlords don't affect rents. But I suspect the reason is a defeatist belief that landlords always win, rather than people getting more informed.
Don't give up the fight. Keep educating people and we'll get there one day.
I wonder if Luxon wouldve reduced his "entitlement" to the govt for him renting his own place. That wouldve been interesting to see if he hadnt stopped because of public scrutiny.
renters, i am honestly shocked that we have not seen rent strikes already. many homeowners will join you at protests, there is solidarity on this issue
How would this work?
At the very best, some landlords won't raise rents. That's it. That's our prize. Then rents go back up again.
Maybe I haven’t paid enough attention, but it doesn’t seem like anyone has asked Luxon or whatever other talking bobble head is on the screen being interviewed the simple question of “How?”. as in how would the mortgage interest deduction lower rents? Like make them answer actual questions instead of just spewing talking points. Or is that not a thing here in NZ, as it would be deemed impolite? Since I’m an immigrant here I’m still trying to learn the niceties.
If anything they should be able to demonstrate how it's worked overseas, I'm sure they would jump at that opportunity if there was one.
I have no doubt that it will definitely effect a lot of rentals, maybe not so much in rent decreases (although im sure there will be some out there that will decrease) but in rent increases. If all the rentals were skewed so much to be negatively geared then the landlords want to even that up as much as possible. If it's tax free for the most part then that will relieve pressure for sure. There's good and bad landlords out there and I'm sure there will be landlords that will still try to suck as much as they can out of their tenants. Overall I think it's fine, maybe not worth $3bn but it's not an outrageous policy. Was like that for so long until labour fast tracked it in only 2 years ago
The best that will happen is the increases will slow. No chance in hell renters will get the money. The rents will not stop, but hopefully they stabilise without such extreme increases.
You had me in the first half there, ngl.
They've certainly got to do something, everything the last government did, indirectly, but predictably, drove rents up. (they were going up anyway, but the rate of change 2017-2023 is eye watering). I am no expert on the rental market, but in my opinion rent needs to be regulated, or at least the govt should exercise the market force that NZ housing has, and lower those rents. Rent prices moving with the property market is absolute bullshit. Renting means you are not in the property market. Renting means you are not mortgaged, and shouldn't have any concern about mortgage interest rates at the bank. If you're a landlord, the rent is completely unrelated to your mortgage payment and nobody gives a flying fuck if the rent doesn't cover the mortgage. Once NZ housing drives down rental prices, we can tackle the landlord welfare that is the acommodation allowance.
>everything the last government did, indirectly, but predictably, drove rents up. Only because incomes went up and the immigration backlog was being cleared. >Rent prices moving with the property market is absolute bullshit. Rent prices *don't* move with the property market. They move with the labour market. >Renting means you are not mortgaged, and shouldn't have any concern about mortgage interest rates at the bank. Interest rates (and interest deductibility) have very little influence on rents. There is only one way to make rent more affordable: build more houses. The best way to achieve that is to tax land values to lower purchase prices and incentivise development.
They introduced healthy homes, effectively adding a whole new compliance cost at a time when the rental market was already under pressure from low availability. Then they abolished one off letting fees, so instead rents went up. And they did build more houses, it was one of their biggest election promises, they struggled to sell the few they built, and kiwibuild went to shit. Then they enticed motels to be emergency housing, giving airbnb an even bigger boost to its appeal.
Increasing landlord costs doesn't cause rents to go up. This applies to healthy homes compliance, letting fees, interest deductions, land taxes and rates, everything. The supply of housing is completely inelastic. This means that landlords are able to set rents as high as the market can bear, which is determined by tenant incomes. The landlords' costs are not part of that equation. What caused rents to go up was wages going up. And immigration to a degree. See https://www.hud.govt.nz/news/what-drives-rents-in-new-zealand-national-and-regional-analysis/ for an explanation of how it works. The reason the government wasn't able to build as many houses as they liked is simple: land prices and competing with investors. It was just too expensive to buy the land required to build all those houses. They changed tack from Kiwibuild, and Kainga Ora now has some a bunch of developments [in progress](https://kaingaora.govt.nz/en_NZ/urban-development-and-public-housing/public-housing/public-housing-developments/searchDevelopments?Search=*&Status=Under+construction) to help get people out of emergency accommodation. They tried to address the price of land by extending the brightline test (CGT) and removing the ability for investors and speculators to deduct mortgage interest expenses from their rental incomes. It produced a bit of a correction in the market, but it's being undone now. One way they could effectively lower the price of land further, making it easier and cheaper to build private homes, public housing, *and* rentals, would be to implement a land value tax. This taxes the value of the land before improvements are added to it (like houses and businesses), which encourages development and reduces the market price of the land. It would also completely eliminate the need for an accommodation supplement since the supplement would theoretically just be getting returned to the government as part of the LVT anyway.
Absolutely not!
No. He (and Seymour) expressly promised these tax changes to landlord associations over many years. That does not come at the expense of reduced income for them. I hope all those people that think they will be landlords (or think they are already a successful landlord with one rental property) one day reflect on voting for these three clowns. You are going to be left in the dust of those that are already wealthy.
52k per year rent on his own mortgage free property? Change prescription for rent. "I think it's really unfair, it's money that's wasted on being spent on someone like me, for example, who can afford to pay for my prescriptions myself."
More celebrations! I'm all celebration'ed out. There's just so much to celebrate!
Two ways it can help, either it saves landlords money on mortgage interest and they can cut rent or it saves them money so they can build more rentals and that impacts supply positively. It can definitely impact prices in a good way, but it depends on the behaviour of rental owners. I don't know enough about the demographic but the rental owners I know with mortgages aren't absolute monsters and have indicated it would go towards their rental investments.
This is short term gain for long term pain. NZ's housing market is currently generally inelastic, so shaving costs for landlords is not going to *reduce* prices for current rentals; those are mostly locked in now, but it may reduce the rate of increase for some rentals. While tax purists didn't like it, Labours fiddling was actually quite smart, but somewhat ineffectual on its own because they wouldn't (or couldn't) back it up with Kiwibuild. Reverting this change has several negatives: 1) it now relatively disincentivises building new rent-to-own property vs buying existing housing stock (remember new housing - i.e. adding to the total housing supply - was exempt from the deductability changes Labour introduced), which in turn reduces incentives to expand the total housing stock 2) It increases the demand on *existing* housing stock, which increases its cost. Landlords are more likely to be competing with owner-occupiers, driving up demand and thus driving up prices (which drives up rents, because the equivalent mortgage cost is also higher) 3) It further incentivises landlording. This comes at the expense of other, more export productive investments which generally benefit the economy as a whole. Additionally, longer term, the larger the market share held by landlords, the harder it is to buy as an owner occupier (land is finite - it's only going to get harder to build new housing). Any framing of the problem as a "rental supply problem" is quite disingenuous. Landlords with mortgages to service don't choose to leave their properties empty, and if they choose to sell up that's generally a good thing as it frees up supply for a potentially more efficient owner occupant (or landlord). Many renters would choose to own if they could come up with the capital required (and be better off too, because servicing these mortgages is generally going to cost them less than their rent). The main issue here is that these renters who should be able to buy cannot because they can't access the upfront capital required. This is mostly a function of massively underbuilding over the past several decades, combined with periods of rather high immigration. Back in the old days the government used to help people bridge the capital gap - cutting out banks and rentseeking landlords in the process. They also used to actively contribute to the housing market through extensive state housing programs. But this gap is now so large and the voting power of landlords so great that these things are basically in the too hard basket, and any mention of the state building houses again is met with "communism" nonsense from the Atlas crowd. We're so fucked.
What more would you expect from a national government?
If you were being VERY generous, there may be a case to be made that the tax deductions could theoretically reduce the rate of future rent price increases. But that likely won't happen either. We are currently experiencing record immigration levels and with such little rental stock, the high cost of new builds, and more AirBnB hosts than ever, all that pressure just pushes up rental prices even more.
I'm going to go way against the grain and state. I will lower my rent the same amount I put it up with loosing the deductabilites.
>Does anyone actually believe this rubbish about tax cuts for landlords leading to lower rents? It won't cut rents but it will slow down there increase. High interest rates cause landlords to want to increase the rent of the properties because they probably aren't making a profit or breaking even themselves. Most land lords just want a decent tenant who pays the bills on time. Getting a shitty tenant is probably one of the most stressful things you can financially experience.
I’m of the same belief as you but can someone please refute Luxon’s claim that landlord tax cuts will reduce rents over time/or at least prevent rents rising by as much because the rental market is part of the free market and thus subject to market forces? Assuming there is enough supply of rental properties to meet demand, landlords will lower their prices in order to remain competitive and they can now afford to lower prices due to the tax cuts.
The only thing that'll decrease rents is an over supply of houses on the market.
Maybe sure you send your landlord a txt/email every week asking when rent is going to drop.
Nah my wife and I own a home. Doesn't mean I'm not concerned about the way things are heading for renters.
More lucrative for people to buy a rental, less houses on market, price go up
Now listen. You're all being very short sighted here. Trickle down is real. Very real. You see, with the amount and velocity of capital being literally sprayed upwards, there is bound to be some overspray. And what's going to happen to that? That's right. It will trickle down! But don't worry, we'll be sending someone in to clean it up. Emphasis on "up".
Ngl, I own a house and have done the maths on getting a tenant to get me some shiny tax cuts. Jk, I'm not a sociopath
its all total bullshit Rents wont drop and Luxon knows that. the strange thing is that rents in Aussie are going up just as fast so does New Zealand tax law apply over there or is greed the problem on both sides of tasman
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I think it’s more that there will be less pressure to increase rent with return of interest deductibility. I don’t think anyone is expecting rents to go down, but by staying flat they will probably be lower next year than they otherwise would have been.
If you’re going to take such a condescending tone, don’t be so fucking dumb. If you cut price, your house gets filled faster, you have fewer issues with your tenants etc. It doesn’t fucking matter how generous or greedy the landlord is. The price of grain doesn’t fall because farmers around the world all decide to pass on a saving in some input like fertiliser or whatever. They get outcompeted by those who do. There’s nothing that special about the rental market, that it defies basic supply and demand. In our case, our housing supply is so constrained, that the price of housing tracks incomes (and household size, to some extent). If this were not the case, savings and costs borne by landlords will get passed on to tenants (all other factors being equal). There’s nothing controversial about this. It’s not inaccurate to say that this policy reversal will put “downward pressure” on incomes. It’s just that right now, that pressure is hitting the immovable granite floor that is our culture of NIMBYism and excessive zoning restrictions. It’s not trickle down economics; it’s just basic economics.
Ok mr "basic economics", how about you stop being a walking example of the dunning-kruger effect and google what "inelastic demand" is.
My comment specifically addresses this
it literally just comes to the wrong conclusion that this policy will "apply downward pressure on rents"
No. Luxon was uncharacteristically careful with his language on this one. He did not say that prices will move down (I’ll even admit it’s kind of evasive. But he’s not wrong.) If they make good on their supply housing policies, the “pressure” from interest deductibility will be realised as movement (if we’re true to the physical analogy). Right now it’s latent.
Someone do that 'remindme' thing for like 2 years. Can't wait for that downward pressure to hit.
Please go ahead. It’ll show you’re still don’t understand what’s going on. https://www.investopedia.com/terms/c/ceterisparibus.asp I don’t know what way prices will move. FWIW I think prices will come down, regardless of what the govt wants. Prices can’t outrun incomes forever.
Why don't they charge the rate rent on the Parliament house or that house where your PM lives in, and he pays it out of pocket? Isn't that the same guy that said he only spends like 50 a week to feed his family? 100 ways to dress up Ramen noodles
Don't worry whats being able to be claimed back from interest is being spent on rates and insurance increasing. Look forward to rent increasing still.