Verve Article - June 2015

Monday, June 1, 2015

Serious about Auckland housing

I’m pleased that because of a strong economy and good management we can invest $790 million to reduce hardship among children living in our poorest families.

Probably the most topical issue in this part of Auckland, however, is the state of the housing market.  Auckland is booming, which is good news, but we rightly worry about the affordability of housing in this city.

We’ve consistently said that freeing up more land and building more houses is the most important thing we can do for housing affordability. That’s why we’ve worked hard with the council to set up Special Housing Areas, to quicken the supply of new houses.  RMA reforms will help also.

But we also need to deal with the demand side, to dampen demand from speculators.  New measures will tighten tax rules around investment properties and overseas buyers of residential property. To make sure everyone pays tax as they should, all non-residents and New Zealanders buying and selling property for profit must provide an IRD number. Non-residents will also have to provide the equivalent number from their home country, and hold a bank account here.

We’re giving IRD the tools they need to enforce this as well – a further $29 million for property tax compliance.

This isn’t about introducing a new tax, but rather ensuring that the existing rules are being enforced. Neither is this about targeting your family home. These new rules are aimed squarely at ensuring investors who buy and sell residential property pay their fair share of tax.

These steps to make property tax fairer sit alongside further supply-side measures to improve housing affordability. Budget 2015 provides $52 million to facilitate housing development on Crown-owned land in Auckland. These measures, alongside the Reserve Bank's moves, are expected to take some heat out of the Auckland property market.

We’re also helping more young New Zealanders into their first home through our KiwiSaver HomeStart programme, which will benefit 90,000 first-home buyers. This programme allows couples to apply for a grant of up to $20,000 to help towards a deposit to buy their first homes.

We know that Auckland’s housing issues are not going to go away overnight. The most sensible thing we can do as the Government is continue to provide pragmatic, forward looking policies that increase housing supply, and help people to get on the property ladder.