“Be prepared to pay it back in 2026″.
That’s Te Pāti Māori’s message to landlords that claim the interest deductibility tax relief that Prime Minister Christopher Luxon says renters are “very grateful” the new government has reinstated.
Te Pāti Māori co-leader Rawiri Waititi says his party’s issuing a “stern warning” to landlords to think twice.
From April 2024, landlords can claim 80% of their mortgage interest on their residential rental properties and 100% from April 2025.
Luxon says his government’s taken this step because “we care about renters”.
“I think if you’re a renter, you’re very grateful for the fact that actually costs that have been passed on to landlords are not being passed on to you,” he says.
“What has been utterly unacceptable is that there’s been a $170 per week increase in rents under the previous government, and they just kept going up and up and up.
“A big reason for why they go up is because landlords have been hit with costs associated with the removal of interest deductibility, and also the extension of the brightline test. Those costs have just been passed straight through to renters with higher levels of rent.”
The prime minister says the rule change will not only benefit renters in the back pocket.
“So actually increasing the supply of rental properties by making sure landlords aren’t actually removing their properties from the rental market, that they aren’t adding those costs of interest deductibility and brightline implications onto the rents, is actually a very good thing.”
But Te Pāti Māori isn’t buying it, accusing the government of “gaslighting”.
“The government are gaslighting everyday New Zealanders by claiming landlords will act in good faith and give rent relief. There is no way anyone who uses housing for profit is going to do that,” says Waititi.
“We’re issuing a stern warning to landlords – if you take from the taxpayer, expect to pay it back as soon as we take office,” he says.
“The same politicians who think feeding tamariki at school is a ‘waste of money’ are giving a $3-billion-dollar handout to themselves and their rich mates.
“This policy should tell you all you need to know about the character of this government and who they work for.”
Waititi says the largest government-sponsored wealth transfer on behalf of taxpayers, outside of the Covid-19 pandemic, will “flip the housing market” in favour of wealthy investors and make home ownership near impossible for first-home buyers.
“Interest deductibility only makes it easier for investors to suck-up an already tight housing market. They are loaded with the deposit, they have equity on existing property, and now they will have the added advantage of deductibility to fuel their borrowing.
“This will make homeownership unattainable for anyone who isn’t using the housing crisis to make money,” says Waititi.