Summarised by Centrist
Dr Bryce Edwards gives both sides of the argument regarding the recent announcement by Associate Finance Minister David Seymour to reinstate tax deductions for landlords. Seymour says the move will put “downward pressure” on a pricey housing market, while Prime Minister Christopher Luxon claims the nearly $3 billion tax cut will alleviate housing affordability issues for tenants. Critics argue the move only favours wealthy property investors.
Despite government assurances, experts remain divided on whether the policy will lower rental costs. Some economists warn that skyrocketing expenses for landlords may offset any potential savings for tenants, citing rising council rates and insurance costs. Others say that tenants will benefit from the move over the coming years. Although there seems to be consensus, according to Edwards, that there is no quick fix to the problem of housing market affordability.
Additionally, concerns arise about the political influence of landlords and accusations of corporate welfare. Critics question the government’s priorities as the government suggests cuts to public services amidst tax breaks for landlords.
Edwards says, “Ultimately, however, the biggest impact on the Government’s popularity on this issue will come from whether the unaffordable housing market is fixed or not.”
