Speculators are cashing in on the National Government’s housing bubble, using tax breaks to leverage multiple properties, says Labour’s Housing spokesperson Phil Twyford.
“New data on residential property investment shows a hefty increase over the last two years in investors with multiple properties. Since 2014 the number of investors with four or more properties is 29 per cent, up from 22 per cent. Those with five or more properties is 17 per cent, up from 15 per cent in 2014, and those with eight or more is 9 per cent, up from 6 per cent.
“Treasury data released under the Official Information Act and obtained by Labour shows investors pocketed $650 million in tax write offs over the last year which – along with skyrocketing house prices – has turbocharged this speculative frenzy.
“Speculators have been the big winners under National’s gross mismanagement of the housing crisis. They are laughing all the way to the bank.
“You can’t blame speculators for trying to make a dollar out of the current housing debacle. National’s policies are a virtual signpost that says: ‘invest your money in property speculation, there’s a killing to be made’.
“But the effect of this speculative mania is pushing house prices through the roof. National’s refusal to crack down on speculators is negligent.
“This is why Labour has signalled it will move against negative gearing – the practice that allows investors to write off losses on rental properties against other taxable income. Over the next few months we are consulting on the design of the policy.
“If we don’t squeeze the speculators out of the market we’ll never rein in house prices. Negative gearing is a massive taxpayer subsidy to speculators,” Phil Twyford says.