A “huge misconception” exists that investment property receives favourable tax treatment, and additional taxes could “spark an investor exodus,” according to NZ Property Investors Federation president (NZPIF) Andrew King.
In the NZPIF submission to the Productivity Commission inquiry into housing affordability King sets out to, "refute the view that the actions of residential property investors have caused housing to be unaffordable, and to address the over-emphasis by some on one policy measure - namely tax - as a means of achieving housing affordability."
In the submission King argues that the role of private landlords in providing accommodation choices for New Zealanders is overlooked, and that it is simply untrue that property investment receives favourable tax treatment.
"KiwiSaver gets millions of taxpayer money to support it, and we have had exactly the opposite," he said.
"Tax depreciation wiped and we've had LAQCs wiped, we've been hit and they've been supported and people still want a capital gains tax, it’s ludicrous."
He warned that the imposition of a capital gains tax could actually further damage housing affordability, either by prompting an exodus from the market as investors sold ahead of a capital gains tax introduction, triggering a slump, or that investors being forced to retain property could result in sales drying up.
"A reduced supply of houses would not only mean increased prices but ultimately rents as well. Both have negative effects on first homeowners, tenants and landlords."
In a more optimistic note King told Landlords that he had a meeting with the Productivity Commission in June when their inquiry paper was released and he said they were "very open" to the fact a lot of mis-information exists around investment property and tax.
As well as outlining the case against further taxes the NZPIF submission also called for the reintroduction of depreciation as part of measures to "further encourage the private rental sector to increase its responsiveness to house New Zealanders, not block them by proposing new impediments."