Hawke's Bay Property Investors' Association

027 777 0178

hawkesbay@nzpif.org.nz

News & Updates

Recent updates

10-11-2014

Thomas Chin reports on political and regulatory news in Ocotber

Monthly Update – October 2014

 

The following is a summary of political and regulatory news or comment affecting the residential rental property industry.

 

  • Cabinet & Portfolios

  • Social Services Select Committee

  • Housing spokespersons

  • Government work plan

  • Councils blamed for home hardship 8/10/14 The Press

  • Andrew Little confirms Labour leadership bid 9/10/14

  • Force owners to bring all homes up to Building Code 17/10/14 Jennian Homes

  • Regulations threaten property growth 17/10/14 ANZ

  • Labour leader nominations 31/10/14 Comment

     

    Cabinet & Portfolios

    John Key has announced a new Cabinet line-up. Of interest to the Association is the division of the housing portfolio across three Ministers. Nick Smith is appointed Minister of Building and Housing (merger of Housing and Building & Construction), Finance Minister Bill English has responsibility for HNZC and Paula Bennett will take on the new social housing portfolio.

     

    Returning as Minister of Energy and Resources, accountable for the Energy Efficiency and Conservation Authority (EECA) is Simon Bridges. Amy Adams is the Minister for Courts (and tribunals).

     

    Social Services Select Committee

    The Social Services Committee considers all matters relating to housing. Its personnel include:

  • Alfred Ngaro (National – Chair)

  • Matt Doocey (N – Dep Chair)

  • Darroch Ball (NZF)

  • Jan Logie (G)

  • Sue Moroney (L)

  • Todd Muller (N)

  • Jono Naylor (N)

  • Parmjeet Parmar (N)

  • Stuart Smith (N)

  • Louisa Wall (L)

     

    Housing Spokespersons

    Labour – Phil Twyford

    Born 1963. He has been a member of Parliament since 2008 as the MP for Te Atatū, with a 2800 majority. He took the seat selection off ousted MP Chris Carter. Prior to politics he was founder director of Oxfam NZ.

     

    Labour’s housing policies:

  • Restrict the ability of non-residents to purchase NZ houses

  • Require landlords to ensure every rental house in NZ complies with a Warrant of Fitness

  • Introduce a capital gains tax and ring fencing of tax losses

     

    [NB: Tywford is a David Parker supporter in the current Labour Party leadership race, due to conclude on 18 November. Also, Parker is the architect of Labour’s CGT and ring fencing policy – see below].

     

    Greens – Kevin Hague

    Hague was a former Director of the AIDS Foundation and Chief Executive of the West Coast District Health Board.

     

    Greens housing policies:

  • Introduce CGT

  • Introduce ring fencing of tax losses

     

    NZF First – Denis O’Rourke

    Born 1946. List MP for NZ First. Rank 7th of 11. First entered Parliament in 2011. Lives in Christchurch. Former lawyer and was a Christchurch City Councillor for 15 years from 1989 to 2004. The media reports he’s not presented himself as gay for very long.

     

    NZFirst housing policies:

  • Every home to have compulsory and adequate insurance cover

  • Encourage private investment in upgrading rental housing through the taxation system,

  • Non- New Zealand citizens be ineligible for home ownership

     

    Government work plan

    On 21 October the Government outlined its legislative and other priorities for the next Parliamentary term. Of relevance to our sector are the Government’s plans around housing affordability and in particular they have promised to:

  • Create more special housing areas (as a result of Housing Accords signed between the Government and local councils)

  • Change the Resource Management Act to assist housing supply in the longer term

  • Introduce The KiwiSaver HomeStart Grant

  • Introduce legislation to allow first home buyers to withdraw their KiwiSaver member tax credit to put towards a deposit

  • Extend the home insulation scheme to another 46,000 low-income households

  • Ensure community housing providers have a greater role in the provision of social housing

     

    The Government’s priorities for the coming term do not include residential tenancy law reform.

     

    Although there is some pressure for reforms to be made to the Unit Titles Act, there is unlikely to be any rapid progress until the Ministry for Business Innovation and Employment (MBIE) completes a review of possible problems including: the working of long term maintenance plans, the security of body corporate funds and issues surrounding dispute resolution, by June 2015.

     

    Elsewhere, trust law reform also does not figure on the Government’s work list. In a series of reports the Law Commission made a case for changes to aspects of trust law including duties of settlors and trustees. The Ministry of Justice is currently analysing the Commission’s recommendations and will report back to the Government in due course. There are somewhere between 300,000 to 500,000 trusts in NZ.

     

    Councils blamed for home hardship 8/10/14 The Press

    Finance Minister Bill English is pointing the finger at local government planning rules, saying they are a major cause of poverty and inequality because they drive up the price of houses. Building on John Key's Cabinet reshuffle, that set up a three-pronged team of ministers to boost social housing provision while reducing Housing New Zealand's state dominance in the sector, English said the Government would press ahead with housing reforms. Inequality in New Zealand would have been improving had it not been for growing housing costs. "So our planning processes have probably done more to increase income inequality and poverty in New Zealand than most other policies."

     

    Andrew Little confirms Labour leadership bid 9/10/14

    Former Labour Party president Andrew Little is running for the Labour leadership. Little has signalled a major shift in direction if he wins the leadership, including a rethink of capital gains tax. A CGT has been part of the Labour Party manifesto in the past two elections of 2011 and 2014.

     

    Force owners to bring all homes up to Building Code 17/10/14 Jennian Homes

    Home owners should be legally forced to upgrade their house to the current Building Code before being able to sell says Jennian Homes. “John Key wants more housing for low-income families, and feels social housing providers should play a more significant role in achieving that. This follows the Government’s trial earlier this year of a 49-point checklist for a warrant of fitness on 500 of its state houses. If the incoming Government deems the trial a success it will be extended to the entire housing stock. It is estimated that would require approximately $9million to achieve. Requirements of the rental WOF include hot-water temperature controls, handrails, smoke alarms, good ventilation, dry under-floor spaces and insulation”.

     

    Regulations threaten property growth 17/10/14 ANZ

    Residential property investors are still confident, growing and looking to buy more properties despite rising interest rates – but many would consider selling up in the event of proposed new regulations. More than half (52%) of all respondents in the 2014 ANZ Property Investment Survey cite government regulations and tax as their biggest worry, up from 37% two years ago. Many also raised concerns about the proposed introduction of a ‘warrant of fitness’ for rental properties.

     

    Labour leader nominations 31/10/14 Comment

    Four MPs Andrew Little, Nanaia Mahuta, David Parker and Grant Robertson are contesting the Labour Party leadership, which will be confirmed on 18 November.

     

    Of interest to property Investors are the candidate positions on a key issue; Capital Gains Tax - which was the party's centrepiece policy in an election campaign. The following table records relevant comments made by each of the MPs:

     

MP

CGT Position

Andrew Little

9/10/14: He signalled a rethink of a capital gains tax

Nanaia Mahuta

“the policy of taxing people who made money by speculating on the property market was not clearly communicated”

 

She recognises:

"a capital gains tax, no longer spoke to the broader constituency of working people

David Parker (current Finance Spokesperson, is credited as the architect behind Labour's Capital Gains Tax)

19/10/14: said the tax was a good policy, but changes needed to be made. "We had a few glitches as to how we sold it. If on review we do keep it, you can bet your boots that if it comes back under me it won't ever apply to the family home and it won't be an inheritance tax”

Grant Robertson

11/10/14: Has defended Labour’s key policies, saying Little had ‘‘possibly got ahead of himself’’ by questioning plans for a higher pension age, centralised wholesale power prices and a capital gains tax”.

 

 

ISSUES UNDER WATCH

What

(sponsoring MP)

Brief description

Status

Building (Earthquake-prone buildings) Amendment Bill

(Nat: Nick Smith)

Sets a requirement for buildings to be earthquake strengthened – also applies to multi-storey or multi-unit residential buildings

Bill has been referred to the Local Government and Environment Select Committee. Submissions closed: 17 Apr 2014. Committee report due: 30 Mar 2015

Healthy Homes Guarantee Bill (Lab: Phil Twyford)

That every rental home in NZ meets minimum standards of heating and insulation

Bill awaiting first reading

State house WOF trial

Minister of Building & Housing trialling a WOF system on 500 state houses

Trial results due

 

END

Tags: political report

comments powered by Disqus