Should Christopher Luxon lower his rent?
The government has just changed the tax rules. So, property investors will pay less tax.
Some journalists frame this as a “reward” or “tax break” for property investors.
On Q+A, the prime minister was asked:
Jack Tame:
“Are you going to lower your rent on the properties you rent out?”
Luxon: “Um, it’s not about me, Jack.”
Jack Tame:
“No, but you’ve said that your settings are going to lead to lower rents”.
Luxon:
“What I’m saying to you is we’re going to be putting downward pressure on rent.”
Jack Tame:
“.... so will you be lowering yours?”
Luxon: “It’s not about me, Jack. I don’t know, I haven’t thought that through…”
So, should the prime minister lower his rent? Let’s talk about the morals and the numbers.
Property investors increased rents by 20% since the rules came in
Some investors say they didn’t increase their rent when the harsher tax rules came in.
So, if investors didn’t raise rents when the rules came in … they shouldn't lower their rent when the rules change back. Right?
Makes sense. But rents have gone up. The median rent is up 20% since the rules came in (March 2021).
That's about $100 a week. The median Kiwi now pays $600 a week in rent (up from $500).