We supported the New Zealand Labour Party in the lead-up to last month’s election because of its excellent housing platform, which promised to address both demand and supply-side distortions via negative gearing reform, banning foreign buyers of existing homes, tighter capital gains taxes, removal of urban growth boundaries, plus bond financing for infrastructure. Its plan to reduce immigration by around a third is also sound, and supported by MB, because it would help to relieve chronic housing and infrastructure pressures, especially around Auckland.
Today, Interest.co.nz’s Alex Tarrant reports that Labour’s demand-side housing reforms are ready to launch, despite there being no explicit mention of it in the coalition agreement with New Zealand First:
Labour is sticking to its guns on demand-side housing policy, with plans to end negative gearing and extend the bright line test making it through the coalition negotiations…
Labour campaigned on policies to end allowance for negative gearing by property investors, and also that it would extend the bright line test – a no-excuses capital gains tax – for non-owner-occupied property from two years to five.
But when its coalition agreement with New Zealand First was revealed – and its confidence & supply document with the Greens – there was no mention of either policy…
Asked specifically about whether the negative gearing and bright line test policies would go ahead, the Labour spokesperson simply said: “Yes” to both queries…
The negative gearing issue in particular garnered much interest when Labour announced it. In May, then-leader Andrew Little announced the practice would be phased out over five years, with loss deductibility reducing 20% a year over that timeframe…
Ardern on Thursday said there had also been movement on Labour’s policy to ban non-resident foreign buyers of existing housing stock, saying work was already underway on the plans. She’s set to travel to the APEC forum in early November to try and convince trading partners to accept the policy, which goes against a number of New Zealand’s free trade agreements…
To date, there has been no report on whether Labour would proceed with its plan to remove (or at least push-out) Auckland’s urban growth boundary and implement a new bond financing system for infrastructure. Hopefully, these will be added into the policy mix as well.
