Matt Ball: NZ Property Investors Federation Advocacy Manager on Labour deciding to keep landlord interest deductibility

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Why did Labour decide not to cut interest deductibility for landlords?

Mike Hosking 0:00
Possibly a surprise, possibly a desperation play, but Labour will not be cutting interest deductibility on investment property. So the tax cut for landlords, that was another one of their catch cries, wasn't it? The two billion dollar tax cut for landlords. They ran that for the last three years. That amounts to hot here given they're not going to change it after all. Now Matt Ball is the Property Investors Federation advocacy manager. He's with us morning. Good morning, Mike.

How did Matt Ball react to the surprise tax announcement?

Mike Hosking 0:22
This one come out of left field for you?
Matt Ball 0:25
Um, have to admit didn't expect it. They were talking about waiting until after pre few before going through the numbers and then um announcing this tax. So uh left field, but it's good news.
Mike Hosking 0:36
It is good news. Will it have a material effect? In in other words, it doesn't change anything. So does not changing something change something?

What impact does keeping interest deductibility have on renters and rental prices?

Mike Hosking 0:44
Actually, yes, it
Matt Ball 0:45
really does. It's a huge relief for rental owners and for renters. This is a terrible tax because it's a straight hit to the bottom line. So the consequences pass straight through to the tenant. Higher rent, less maintenance, less investment in their properties, and eventually fewer rentals. So every renter in New Zealand should breathe a sigh of relief about this change. They are more secure in their home. rents won't skyrocket and landlords can now get on and invest in in and improve their property.

Is Labour’s decision driven by politics or genuine concern for tenants?

Mike Hosking 1:12
Do you reckon Labour's work that out or do you reckon they're in trouble in the election so this is political and does it matter?
Matt Ball 1:19
Um doesn't matter. I look, they've definitely worked it out. We spent the last two years talking to them about this. It shows the value of talking to people and making a coherent, evidence based argument. We're not going to take all the credit for this, but we've been working on it since the last election. And what we've done is show Labour how this really hurt mum and dad landlords, but also how it hurts their tenants, our tenants, and it's paid off. Is it political?

How did the Property Investors Federation influence Labour’s policy change?

Matt Ball 1:46
Well, it makes them a smaller target and it takes away a huge bone of contention. There are over three hundred thousand landlords. And I can promise you, if Labour had announced this tax, we would all be going to our tenants and telling them exactly the consequences.
Mike Hosking 2:00
Because you can't argue with the results, can you? I mean, look at the rental market at the moment. It's not great for the investor who wants some sort of game, but I mean rentals are flat, there's plenty of choice. The market seems to be about right.
Matt Ball 2:12
Yeah, it does.

What does the current rental market look like after the policy decision?

Matt Ball 2:13
And if you look back in time, the three years, the last three years Labour were in power when they brought this policy in, rents went up twenty five percent. Twenty five percent over three years. It's devastating for people in a cost of living crisis. So this is the right decision. And Hitkins hinted at this yesterday. He talked about not wanting um landlords to put rents up on tenants. Um clearly the message got through. This is
Mike Hosking 2:34
good. All right, nice to talk to you. Appreciate it very much, Matt Ball, New Zealand Property Investors Federation Advocacy Manager.
Matt Ball 2:41
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