John Key’s weak measures to rein in the astronomical profits property speculators are making are an admission – finally – that there is a housing crisis, Labour Leader Andrew Little says.
“But yet again National is tinkering with the housing market. The moves announced today are tentative and incremental.
“The Prime Minister is creating a massive loop hole with his new ‘bright line’ test which will exempt speculators who hold onto their properties for longer than two years.
“A tax which only applies to sales within this arbitrary period will not deter the land-bankers and will only capture the small number of short-term buy-and-flick speculators.
“It will take two-and-a-half years for this tax to fully come into effect. That is a long time to wait when Auckland house prices rose over $100,000 last year.
“For years the Prime Minister has denied there is a crisis, refused to admit foreign investors are pushing up house prices and said there is no need to dampen down housing demand. Today John Key has been forced to eat his words.
“This is not only an admission there is a housing crisis, it is an admission that the intention test in the current law is not working.
“However, it is unclear whether this measure will have much effect on Auckland’s run-away housing market. I call on the Government to release its figures showing how many speculators will be caught and how many will escape untouched.
“What is needed is a more comprehensive and wholehearted crack down on speculators, alongside Labour’s policy of banning residential property sales to foreign speculators,” Andrew Little says.