Labour's housing policy could bite the hand that feeds it
Blog by Mark Sainsbury
Labour's solution to the housing crisis: get out the ruler and rap the knuckles of anyone getting a tax break from rental properties.
What Labour is trying to do is make investing in property less attractive so investors won't be in competition with first home buyers.
To do this they would remove the tax break that allows you to offset any losses from your rentals against your other income – it's nice work if you can get it.
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But there is a real problem. Not everyone who buys a rental property is an evil speculator determined to rob the young of their place on the property ladder. They are also our parents or grandparents who decided an investment property could be the very thing needed to safeguard their financial future, their retirement.
Remember how often we have been lectured about providing for ourselves in our old age as we can't count on anyone else to do so? Why are we now being told the opposite?
Andrew Little - who was in fine 'Angry Andy' form over the weekend – can't really answer the questions as to how many of those mum and pop investors are going to get caught in this. The policy could bite the very hand that feeds Labour.
The party says 35 percent of non-residents who owned rentals declared losses of $47 million in the last year. That's 8000 out of 23,000 overseas owners. Labour also said 91,000 taxpayers declared rental losses in 2015 claiming $149 million in tax breaks, and $60 million of that went the top 10 percent of income earners.
So the rich are getting richer according to Labour, but what about the rest? Among the remaining $90 million claimed are they all greedy rich speculators, or are they your mum, dad and grandparents?
The other problem with Labour's policy is it could mean that rents go up. If property owners can't claim the tax breaks guess who is likely to pay.
Then again, someone has to pay the price and Labour has made the first, bold move.
Watch Andrew Little talk with Duncan Garner on The AM Show this morning here
Mark Sainsbury hosts Morning Talk from 9am-midday on RadioLIVE.