Labour will shut down tax breaks for speculators and use the savings to help make 600,000 homes warmer and healthier over the next ten years, says Leader of the Opposition Andrew Little.
“It’s time for fresh thinking to tackle the housing crisis. Housing is Labour’s top priority. We’re committed to restoring the dream of homeownership.
“After nine years of National, the housing crisis is getting worse and worse. They have let speculators run riot with the help of a tax loophole that means taxpayers effectively subsidise their purchases. It has pushed up house prices and made a first home even more out of reach for young families.
“Labour will close the speculators’ tax loophole. Losses on rental properties will be ring-fenced meaning they will no longer be able to be used to reduce the tax that speculators owe on other income. This will create a level playing field for home buyers and help families get a fair shot at buying a place of their own.”
Last year speculators used this loophole to avoid paying about $150 million in taxes. The loophole is heavily used by foreign buyers and most of the gains go to the people on the highest incomes.
“The speculators’ tax loophole will be phased out over five years. This will save taxpayers around $150 million a year once fully implemented, and a total of $1.2 billion over a decade. Labour will invest this money into making homes warm and healthy.
“As well as closing this loophole Labour is going to ban foreign speculators from buying existing homes, and we will make someone who sells a rental property within five years pay income tax on the capital gain.
“Labour will invest the savings from closing the speculators’ loophole into helping both homeowners and landlords make their houses warm and healthy. We will make grants of up to $2,000 per dwelling towards upgrading insulation and heating. The grants will pay for up to half the cost of insulation upgrades and double glazing that meet or exceed the current building code, or of the cost to install a clean, fixed form of heating.
“This investment complements my Healthy Homes Bill, which will soon be back before Parliament. It requires all rentals to be fit for families to live in.
“This is part of Labour’s fresh plan to tackle the housing crisis. The challenge for other political parties is this: are they happy to keep subsidising speculators, or will they back Labour’s plans to help families achieve their Kiwi dream and invest in warm, dry, healthy homes?” says Andrew Little.