This Government is proposing a significant tax on Mum and Dad landlords despite promising prior to the election that they would impose no new taxes, National’s Shadow Treasurer Andrew Bayly says.
“According to advice from Treasury, IRD, and the Ministry of Housing and Urban Development dated February 2021, the removal of interest deductibility means a landlord with a $700,000 mortgage would face a tax increase of approximately $9,240 a year.
“The Government says it is attempting to target people who own many properties, but has no answer for the many New Zealanders who invested in one rental property for their retirement and will also be affected if they have a mortgage on that property. For many, the additional tax will make their investment uneconomical and they will be left with little choice but to sell up.
“Revenue Minister David Parker said that the goal of the policy is not to get people to sell their properties. He is going to be very disappointed when he realises that is exactly what many will need to do. Or perhaps he won’t be.
“This is a blatant tax grab from a party who promised not to increase taxes, being disguised as closing a ‘loophole’.
“The Government’s consultation document reveals that the actual implications of the policy are going to be so complex that many people who currently own a rental will need to hire a tax accountant in order to be able to correctly complete their tax returns.
“This is another example of this Government wanting to impose their ideology of limiting property ownership, controlling our consumer decision-making, and even restricting our speech. Hardworking New Zealanders deserve better than this.”
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