Instead of claiming only 50% of your interest costs next year, you can now claim 80%.
And the lower taxes will come back a year early.
Lots of investors left the market because the higher taxes hurt too much.
With those higher taxes gone, investors will be back in the market.
#2 – The Bright-Line gets rolled back to 2 years
It’s not in the NZ First or Act coalition agreements.
But rolling back the Bright-Line is point 20 in National’s 100-point economic plan. So it’s now official government policy.
This is a more investor-friendly policy. So expect more investors to say, “property is now worth it. Let’s give it a go.”
#3 – The risk of investing goes down with these tenancy rule changes
90-day “no clause” terminations are back. That means it’s easier to get rid of a tenant if you run into trouble with them.
The notice periods also go down. If you want to move back into your property, you only have to give 42 days notice rather than 63.
And soon, you’ll be able to better protect yourself by using pet bonds. You can charge a higher bond if your tenants want a pet.
This will decrease some of the perceived risks of investing. That will encourage more investors to enter the market.
#4 – They’ll rewrite the law to make it easier to get a mortgage
Remember the CCCFA? That was the law where the banks started checking how much coffee you bought and how much you spent on Uber Eats.
The three parties have committed to rewriting it to make it easier to get a mortgage.
Add these policies up and:
- Being an investor becomes more profitable (less tax)
- It becomes a little less risky (easier to get rid of bad tenants)
- It becomes a bit easier to get a mortgage
These will increase demand for houses, especially from investors. But they also have policies that impact supply.
How the Government’s policies impact the supply of housing
A whole load of policies aim to make it cheaper and easier to build new properties.
#1 – More properties will come to the market
I’ve already mentioned the Bright Line.
This will increase demand, but it will also increase the short-term supply of listings.
Some investors own properties they want to sell. But they’ve been holding on because they don’t want to pay tax.
This change will mean some investors will bring their properties to the market.
#2 – Easier to build granny flats and minor dwellings
Hidden in NZ First’s agreement is a policy to make it easier to build granny flats.
They want to change the Building Act and Resource Consent system. The goal is to let you build a minor dwelling (60 sqm or less) with only an engineer’s report.