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Image: Archi Banal
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PoliticsOctober 25, 2023

I can’t wait for my rent to go down

Image: Archi Banal
Image: Archi Banal

No-cause evictions, fixed-term tenancies and tax breaks for landlords. This renter wants to know, when will these perks trickle down as promised?

Early on election day, when we kind of knew National would win but still needed the final nail in the coffin, my “mum and dad landlords” turned up, unannounced, at the property where I live. At 10am they stood outside my bedroom window with a scaffolding guy for about 20 minutes, discussing when might be a good time to paint the window frames (they decided on March). They then circled the entire house – pointing out all the windows, I guess. I was still in bed. 

Recently, I have been feeling held hostage by my landlords. Two months ago, under the Labour government, they put the rent up almost as soon as they legally could (one year, one month and one week after we moved in). Some of the reasons they cited in their letter were “government costs”, “interest rates”, “council rates” and “etc”.

But now there’s no Labour government to enforce these “government costs”. This could be where Christopher Luxon appears as a knight in shining armour – possibly on a 50cc scooter. He will point at landlords and call them “not evil”. His prime-ministerial pen will come and cross out these “government costs” and it will not at all be considered a conflict of interest that he has three residential rental properties of his own (the other four he owns are not used specifically as residential rentals). 

Christopher Luxon against a blue background with medium density housing
Luxon owns seven properties in New Zealand. Four are investment properties. Image: The Spinoff

When he was just a man on TV on June 11, Luxon said, “They’re (Labour) adding costs to landlords that lead to higher rents. Rents are up $160 a week under this government.” I do not know where his numbers came from, but just like landlords would like a tax break, I would like a $160 rent decrease. I would pretty much be rich with that back pocket boost.

One of the policies the incoming government plans to use to stop the war on landlords (thanks to Chris Bishop for this apt descriptor) is reintroducing interest deductibility. This means landlords could offset their mortgage interest rates against rental income, thus providing a tax cut, thus minimising their “government costs”. 

National’s plan is staggered and designed to reverse the current staggered Labour approach. Currently, landlords can deduct a maximum of 50% of their interest repayments, with that set to drop to 25% next year and 0% in 2025.

National has promised to keep it at 50% next year and bring it up to 75% the following year – by April 2025, 100%. (If Act gets its way, it will be back at 100% immediately.) Craig Renney, economist at the New Zealand Council of Trade Unions, said that on average, National’s policy would save landlords $6,700 of tax over five years. This works out to about $27 a week. That is, $27 a week my landlords could trickle down to me. It is not $160 a week, but I’ll take it. 

I don’t want to rush my landlords though. I understand that a staggered approach means these benefits won’t trickle down immediately, but I’m willing to wait. Maybe in April 2024 (the new tax year), I’ll get a letter about a $10 rent decrease, and I’ll smile knowingly and thank Mr Luxon and Ms Willis for their downward pressure.

(Image: Getty; additional design: Tina Tiller)

Along with reintroducing no-cause evictions and fixed term tenancies and unwinding the bright line test, National’s rental policy was criticised for its potential to exacerbate the housing crisis and give landlords too much power over tenants. National’s thinking is that laxed tenancy laws will apparently entice more property owners to put their places up for rent, so that when I’m evicted for no reason I’ll have plenty of other options to choose from. They might be really far away because National has pulled out of the Medium Density Residential Standards and is instead encouraging more sprawling growth to cities. I can’t wait to be stuck in traffic jams so I can become a more empathetic and better person

Luxon and co. honourably guarded the policies, telling us over and over again that these policies would put “downward pressure” on rents. The argument at heart is that if you save landlords costs, they will exploit their tenants less. A win for landlords is a win for renters, right?

On Radio New Zealand, housing advocate Geordie Rogers said, We will continue to see landlords extracting as much money as possible” and “renters will not see the benefit”. It’s almost like he thinks landlords own property for the sole purpose of making money, and not the charitable vocation to provide a basic human right. Then the New Zealand Property Investors Federation (a group of landlords) chimed in to say that rental property owners are facing financial difficulties and need this tax break. I would hate to think what they might say about bank accounts where rent is going out rather than in.

My glass of water is half full even when it is empty and flowers are pretty even when they have started to smell because they are rotting. Despite evidence to the contrary, I am eagerly anticipating Luxon and Bishop’s downward pressure to crush my rent. I’m not the only one: there are 510,000 private rentals in Aotearoa, and no doubt all of their inhabitants want the rent to go down. 

Luckily, Luxon is not my landlord, because when asked if he would lower his rents, he did not say yes, which amounts to saying no.

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