National’s new tax policies to bring back foreign buyers and landlord tax breaks could heat up New Zealand's housing market, according to experts.
The bright line test — which currently sees tax paid if a house is sold within a decade — would also be reduced to two years under National's plan.
Various experts spoken to by 1News said that it was the combination of the policies that would see prices and demand increasing.
They were also concerned that Kiwis would continue to pour money into the housing market, rather than other parts of the economy.
Labour's finance spokesperson Grant Robertson suggested the "numbers don't add up."
He said: "There is a real risk that it puts first home buyers out of the market."
Meanwhile, Ray White chief economist Nerida Conisbee said the opposition party's policies would "for sure impact prices in some of [the country's] most expensive property markets" — like Queenstown — with the potential return of foreign buyers.
National hopes the change will bring in around $740 million. Under the party's plan, buyers would have to pay a 15% tax and can only purchase homes over $2 million.
However, Conisbee said that the level of foreign demand may not be as high as before, meaning there could be a large hole in the tax take.
“We know that China’s foreign buyers weren’t as active as they were last decade. It is likely we won’t see quite the same level of activity that we saw prior to 2017," she said.
Half-price transport for under-25s would also be on the chopping block under National's tax plan.
National leader Christopher Luxon defended his party’s numbers and assessments.
“We are rock solid on our numbers and on our assessments," he said.
Meanwhile, at the other end of the market, National says landlords will have it easier under its policies, which the party and others argue would be good news for renters.
Property investor Shirley Berryman said: "We provide a home for them. And we do try to do that as cost-effectively as we possibly can.
"If we're running a business we need to be able to run at a profit, otherwise we'd be silly to be doing all of the work."
But Berryman added that she didn't expect rents to fall as a result of a potential change.
“I think the answer really has to be no — because we’re behind where our rents could be anyway."
National's characterisation that the policies could help renters was rubbished by the Greens and advocacy group Renters United.
Human Rights Commissioner Paul Hunt has released the findings of a two-year-inquiry into the country's housing crisis.
A spokesperson for the group, Geordie Rogers, said: “I am absolutely certain we will see no downward pressure from giving landlords more money."
He also criticised the lack of focus on building new houses by political parties.
SHARE ME