Labour’s housing plan: Your questions answered

The short answer is that there are many underlying causes for New Zealand’s housing crisis. It’s a problem that has been decades in the making, and there is no silver bullet to solve it. It will take time to turn around.

The package we’ve announced today includes urgent and long term changes that will increase housing supply, relieve pressure on the market and make it easier for first home buyers.

Since 2017, we’ve taken a number of steps to improve housing in New Zealand.

We’ve stopped overseas speculators, built a record number of public houses, banned unfair letting fees, overhauled tenancy laws to make renting fairer, introduced standards so rentals are healthy and warm, launched a progressive home ownership scheme to help Kiwis into homes, and set out our Homelessness Action Plan. To ensure we have the skilled workforce we need to build more houses, we’ve also rolled out free targeted trades training and apprenticeships. This has already seen around 30,000 people take up training in the construction sector.

Now, we’ve put in place the next steps in our plan. This includes:

• Making it easier for first home buyers to get into a property, by lifting the income caps on the First Home Loan and First Home Grant programmes so more people can access this support.
• Helping to tip the balance in favour of first home buyers by extending the bright-line test from five years to 10 years, and by closing a long-standing tax loophole that benefits property speculators.
• Removing barriers holding up the building of new homes. We’re launching a $3.8 billion Housing Acceleration Fund, which will speed up the pace and scale of house building and jumpstart developments by funding the vital infrastructure like pipes and transport links needed for new housing.
• Incentivising investment in new builds, which will help drive demand and ensure more houses are being built.
• Making sure we have the skilled workforce we need to build more houses, by extending our Apprenticeship Boost payment, which has already enabled businesses to take on 21,000 apprentices.

There’s no simple answer for fixing the housing crisis, but together, the measures we’ve announced will make a real difference.

We’re making it easier for people to buy their first home. We’re supporting more Kiwis into their own home by lifting the income caps on Government assistance for first home buyers.

This includes First Home Loans, which only require a 5% deposit instead of the 20% required by most lenders, and First Home Grants, which provide up to $10,000 to help first home buyers pull together a deposit. If you earn up to $95,000 each year (for single buyers) or up to $150,000 (for people buying together), you may now be eligible for this support.

We’re also closing a tax loophole that benefits property speculators, and extending the bright-line test to 10 years. Together, these measures will ease pressure on the market and help more first home buyers get into a property.

The bright-line test is a way to tax the financial gains people make when they buy and sell a house for the purpose of earning income. It’s just like paying tax on any other income you might make.

Currently, the bright-line test comes into play if you sell an investment property within five years of buying it. This means if you buy a rental property and then sell four years later, you have to pay income tax on the profit you make.

As part of our plan to level the playing field for first home buyers, we’re extending the bright-line test to 10 years. This means if you sell your investment property within 10 years of buying it, you may have to pay income tax on the profits.

The bright-line test does not apply to your family home or inherited property, or to residential properties used for business or for farmland.

Extending the bright-line test to ten years will dampen demand in property speculation and make things a little easier for first home buyers.

It will also encourage people to invest in new builds, rather than existing housing, because newly built homes are exempt from the changes to the bright-line test. This will also help ease the pressure on first home buyers, and will encourage developers to build more new homes.

No - the main family home is not included in the bright-line test. Neither are residential properties used for farmland or business.

No. We are extending the bright-line test, but this is an existing part of our tax system, and was introduced by National in 2015. We’re extending it from five years to 10 years to level the playing field for first home buyers.

Labour’s housing plan will incentivise investment in new build homes, driving development and ensuring more houses are being built. This means that if you invest in a new build property, you will be exempt from changes to the bright-line test and interest deductibility policy.

This will make investing in new builds a more attractive option for investors and drive demand for new houses, which will help ease the pressure on first home buyers and ultimately help build more houses.

The Government can’t solve the housing crisis alone. When it comes to building new houses, local government also has a crucial role to play – but often, councils are unable to fund the vital infrastructure like water networks needed for new developments.

One of the things we’re often told is that a lack of the roads and pipe needed to service new housing is one of the main infrastructure blockages that are holding up the building of new homes. To deal with this we’re launching a $3.8 billion Housing Acceleration Fund, which will speed up the pace and scale of house building.

This will jumpstart housing developments by funding the vital infrastructure needed for new housing. It will help large-scale construction projects get going faster, and is something local government and developers have been calling for for some time.

By removing these barriers for local government, we’re helping to enable more houses to be built, right across the country.

We know we need to train and upskill more workers for our construction sector. Thanks to our free apprenticeships and targeted trades training scheme, we’ve already seen 100,000 people take up trades training, including more than 30,000 people going into construction.

To build on this growth, we’re extending Apprenticeship Boost payment until August 2022 to help employers keep and take on new apprentices. This will help ensure we have the skilled workforce we need to build more houses and keep our construction sector moving.

The Apprenticeship Boost payment provides employers up to $1000 a month for first year apprentices and $500 a month for second years.

Apprenticeship Boost has already enabled businesses to take on more than 21,000 new apprentices, providing a much-needed boost to our construction workforce.

Our latest announcement, which sets out the next steps in our housing plan, builds on the work we’ve already done to improve housing in New Zealand.

This includes:

• Stopping overseas speculators
• Banning unfair letting fees
• Building a record number of public houses
• Overhauling tenancy laws to make renting fairer
• Introducing standards so all rentals are healthy and warm
• Delivering on our promise to repeal and replace the RMA to fix our planning laws
• Launching a progressive home ownership scheme to help Kiwis into homes
• Setting out our Homelessness Action Plan
• Rolling out free targeted trades training and apprenticeships to grow our workforce (which has already seen around 30,000 people take up training in the construction sector!)