Wellington Property Investors' Association

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wellington@nzpif.org.nz

News & Updates

Recent updates

30-09-2008

Update on legislation of interest to property investors

SEPTEMBER 2008 Report
The following is a report for the month of September 2008 concerning various issues monitored and or activities undertaken on behalf of the Federation.
 
ELECTION DATE – 8 November
Helen Clark has announced 8 November as the election date.
 
Prior to the announcement Parliament went into urgency to enact legislation crucial to the Labour Party’s election campaign. Housing-related legislation passed included the Real Estates Agents Bill and Affordable Housing: Enabling Territorial Authorities Bill.
 
Real Estate Agents Bill
The Bill enables the Government to regulate the performance of real estate agency work and comes into effect around November 2009.
 
Of interest to the Federation were during the course of the bill’s debate the National Party re-raised concerns about the lack of regulation of property managers and property management, and the lack of protection for consumers dealing with them.
 
Post-election, the new Government will review the property management regime.
 
It is understood that Department of Building and Housing officials are at the very early stages of their thinking, and key industry people will be consulted next month.
 
Further, the Maori Party who considers Maoris maybe exploited by unscrupulous traders or misleading representation would support a review.
 
Affordable Housing: Enabling Territorial Authorities Bill
The Billenables councils to require developers to either: include affordable housing in their developments, make payments towards the cost of providing affordable housing elsewhere, or provide land for the construction of affordable housing.
 
One implication for developers is that the new law bans covenants stopping homeowners from selling or renting to Housing NZ.
 
Other
Other Bills of interest to the Federation, that were not progressed and to be dealt with by the new Parliament include:
·         Residential Tenancies Amendment Bill
·         Unit Titles Amendment Bill
 
Also to be dealt with in a new Parliament are the ongoing Select Committee inquiries including the:
·         Inquiry into housing affordability in New Zealand and
·         Inquiry into the future monetary policy framework (see below)
 
 
Parliament will resume early December.
 
 
Inquiry into the future monetary policy framework - Report
After some 16 months of inquiry, Parliament’s Finance and Expenditure Committee released its report on 18 September.
 
The inquiry was tasked with examining monetary policy options including the recent Treasury and Reserve Bank proposals contained in their Supplementary Stabilisation Instruments report.
 
Of interest to the Federation was the Committee’s recommendations and findings related to investment housing.
 
They found no evidence in favour of additional controls such as mortgage interest levies and they did not recommend a capital gains tax (although this is favoured by the Green Party). On ring-fencing losses, the Committee made no specific recommendation on this, but considered that the Government should be aware of this potential tax opportunity. As ring fencing has not been categorically ruled out this issue needs to be closely monitored.
 
The full report, 376 pages, can be viewed at: http://www.parliament.nz/en-NZ/SC/Reports/1/1/d/48DBSCH_SCR4210_1-Inquiry-into-the-future-monetary-policy-framework.htm
 
Housing POLICY - National
The National Party announced its housing policy on 9 September.
 
Of direct interest to the Federation was the party’s policy on rental properties. Specifically the party will:
Maintain the Accommodation Supplement to help low income earners with board, rent, or mortgage costs, and make sure it keeps pace with rising rents and regional variations.
• Encourage the supply of decent rental accommodation by balancing the needs of tenants and landlords and ensuring it's easy for families and landlords to secure long-term rental agreements, and retain existing tax rules and deduction provisions for rental property owners.
 
Housing POLICY - Greens
The Green Party announced its housing manifesto on 1 September.
 
Policies of interest to the Federation include:
·         Introducing a capital gains tax on all but the family home
·         Tightening the rules around Loss Attributing Qualifying Companies and equivalent methods of achieving tax deductions
·         Building and acquiring 3000 state a year for the next 3 years.
·         Government commitment to support for rainwater tanks, retrofits, solar heating, grey water recycling and local wastewater systems.
 
Housing New Zealand vs. Tenancy Tribunal - Update
The press (13 September) has reported that the Tenancy Tribunal has been ordered to rehear Housing New Zealand's (HNZ) case involving efforts to evict a family living in an Auckland state house.
 
The judgement is of significant interest for the Federation and for all residential landlords.
 
The court decision quashes a ruling by the Tenancy Tribunal that, if left in place, could have altered the legal balance between a tenant's rights and a neighbour's rights."
 
HNZ argued that the tribunal had significantly erred in the way it had run the hearing, and in the way it had applied the law, she said.
 
HNZ will wait for the Tribunal to set a new hearing date.
 
END
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