Election And Property

The New Zealand election is on 14 Oct. 2023 and as usual election has an impact on the property market. Usually, 3~6 months before the election property market slows down due to both buyers and sellers waiting on the election result. In other words, people postpone their decisions until after the election. But this year as the property market is in its downturn, prices are so affordable and the outlook of the property market after the election will continue recovering, then there are lots of activities in the market in comparison to other election years. Here is each political party plan which will impact property prices and property investors. let’s review:  

Labour Party:

• Bright Line Test: Keep 10 years
• Interest Deductibility: Continue current policy, 100% interest non-deductible. 
• TAX: Tax bracket no change, Top-tier income tax rates 39%, No Capital Gains Taxes
• Other: Remove commercial property depreciation
• More details here

National Party:

• Bright Line Test: Reduce to 2 years
• Interest Deductibility: Phase out interest deductibility in 2 years.
• TAX: Tax bracket adjusted with inflation, Top-tier income tax rates 39%, No Capital Gains Taxes
• Other: Remove commercial property depreciation, Foreign buyer tax
• More details here

Green Party:

• Bright Line Test: Keep 10 years

• Interest Deductibility: Continue current policy, 100% interest non-deductible. 

• TAX: Tax bracket adjusted with inflation, Top-tier income tax rates 45%, 2% Capital Gains Taxes for assets over $2m.
• Other: Rent control
• More details here

ACT New Zealand:

• Bright Line Test: Remove it (or reduce it to 3~6 months).  
• Interest Deductibility: Remove interest deductibility immediately. 
• TAX: Tax bracket adjusted with inflation, Top-tier income tax rates 33%, No Capital Gains Taxes
• Other: Abolish the RMA and amend the Building Act.
• More details here

Deal of the month

               This is the best deal I came across recently, 10 Almadale Place, Hillcrest, Northshore:

• Private, 3 bedrooms, brick and tile
• 1350m land for future development potential ($1m+ future gain)
• Located in Beverly-Hill-Crest (Hillcrest, Northshore, Auckland)  
• With 70K in renovation $200K equity gain
• CV $1.81m, pass in auction, asking price $1.4m, sold $1.25m (immediate $300K gain)

From my point of view, regardless of which party is elected, the property market will continue its cycle and political decisions will only have a short impact (1~2 year) on it. As usual, I recommend you make a property purchase decision based on your financial ability and risk appetite rather than link to a political announcement. I can help you to optimise your decision, and save you time and money when you purchase your next property.