After questioning in Parliament today it’s clear Revenue Minister David Parker has no idea how his interest deductibility policy will work, National’s Shadow Treasurer Andrew Bayly says.
“Minister Parker was asked some basic questions such as how many people will be affected by his new policy and how much revenue will be raised for this, but couldn’t answer.
“The Minister has clearly not done his due diligence with the policy.
“The Government dropped the new mortgage interest deductibility rules with no warning. This is clearly rushed policy and a result of the Government panicking because it’s realised none of its housing policies are making a difference.
“When asked whether a Mum and Dad who rent a home to their own kids while they’re at university will be able to deduct mortgage interest, Minister Parker didn’t know.
“When asked if an extension onto a property would be considered a ‘new build’ and therefore exempt from the rule, Minister Parker didn’t know.
“When asked if a farmer would be able to deduct interest from a mortgage on farmland with a rental property on it, Minister Parker didn’t know.
“These are not niche, unusual cases, these are situations that impact many New Zealanders, and they’ll be questioning whether they will now be targeted.
“But how are New Zealanders meant to know if they will be caught by this new policy if the Revenue Minister has no idea?
“Roughly 77 per cent of all landlords in New Zealand only own one rental property. The Government has now labelled these New Zealanders as speculators, and their tax bill will go up as a result.
“It’s wrong that Mum and Dad investors are now being demonised as speculators and having utilised a ‘tax loophole’, when the ability to deduct the interest costs has been a legitimate business expense for many decades.
“Labour continues to prove it can’t be trusted on tax.”
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