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UNIT TITLES ACT & REGS – Technical consultation closed

The Ministry of Business, Innovation and Employment - Building and Housing Group closed public submissions on the Unit Titles Act 2010 and the Unit Titles Regulations 2011 (which have been in force since 20 June 2011).

The public was asked its views in respect of amendments to the regulations to correct a number of minor and technical issues with the Act and the Regulations.

The changes will be included in a Statutes Amendment Bill which is under consideration by Parliament. Members of the public will have further opportunity to comment on the various amendments when submissions are called by the Select Committee.

LABOUR RESHUFFLE – New Housing spokesman

Labour leader David Shearer (25 Feb) reshuffled his opposition spokesperson list.

Of interest to the Federation Te Atatu MP Phil Twyford takes over the housing portfolio from Annette King. He is the third housing spokesperson for Labour since National-led Government came to power in 2008. Effectively, Twyford is being lined up as the new Housing Minister, should Labour win the election in 2014.


Late last month the Hon Nick Smith was returned to Cabinet as the new Minister of Housing. Smith replaced Phil Heatley.

Paula Bennett, welfare minister, takes on the role as the Associate Minister of Housing and according to the Prime Minister her appointment “reflect(s) the strong links between these two areas”.

Housing issues are particularly pertinent, especially their affordability. Smith is likely to review the Productivity Commission's recent report on housing affordability (issued April 2012) and seek the advice of officials before beginning the reform process such as changing regulatory processes with the aim of speeding up and simplifying consent processes. It will be recalled that the Commission found that “taxation was not a key driver of the recent housing boom”.


The Prime Minister’s opening Parliamentary address at the beginning of the month indicates the direction the Government intends to take on housing matters. Specifically, the Government intends to build more state houses.

And in response to the report of the Productivity Commission on housing affordability, the Government will undertake work to: increase land supply; reduce delays and costs of consent processes associated with housing; improve the provision of infrastructure to support new housing; and improve productivity in the construction sector.

Nothing in the above appears problematic for Federation members.

The same cannot be said of the plans announced by Labour’s David Shearer. To appeal to his electorate Shearer has also proposed a plan to build more state houses. And Labour also proposes a capital gains tax on rental property, all in the guise of shutting down residential property speculation and switching people to “more productive investments”. Interestingly, the media have not focused on the CGT and its wider implications and unintended consequences.

IN COMMITTEE – Boarding houses

During the month the Social Services Select Committee continued its inquiry into boarding houses.


The Finance Select Committee considered evidence and oral testimony on the Taxation (Livestock, Assets Expenditure, and Remedial Matters) Bill during the month.

The law change is of interest to property investors who have baches. It means deductions available to them will be directly linked to the number of days a year the property is rented out for. This is a change from the current situation whereby deductibility for say interest costs can be offset against personal income.

The Committee is to report its findings back to Parliament by the end of May and the new tax rules are scheduled to come into effect on 1 April 2013.


  • Ministry of Justice Civil Fees Review – Submissions on consultation paper closed 2 Nov 12
  • Statues Amendment Bill – to implement a range technical and minor changes to the Unit Titles Act & Regs – Submissions to the Government Administration Select committee – closed 15 Feb 13
  • Review of the law of trusts “Preferred Approach Paper on Law of Trusts” (includes ways of managing property & other assets) – Submissions to the Law Commission closed 23 Feb 13.
  • Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Bill – Select committee hearings – Feb 13.
  • Boarding house inquiry – Social Services Select Committee ongoing inquiry into boarding houses in New Zealand
  • Trustee Amendment Bill (clarifies functions, duties & rules for trustees) - Awaiting 2nd
  • Energy Efficiency Conservation (Warm Healthy Rentals) Amendment Bill (to require all rental properties to have minimum standards for warmth and insulation by 2018) - Pending ballot selection for Parliamentary debate
  • Amendment to the Land Transfer Act 1952 – modernisation of the law to reflect the current use of electronic conveyancing and other technical improvements be made - pending



Appendix A: Selected Media Statements – February 2013

1) Labour housing plan won't lower prices  12/2/13 Radio NZ

2) Insulation, heat issues for tenants* 15/2/13 ODT

3) $68m in tax reaped from property speculators  25/2/13 RadioNZ

4) House buyers may need bigger deposit* 27/2/13 Fairfax


1) Labour housing plan won't lower prices 12/2/13 Radio NZ

The Government says advice from the Treasury proves Labour Party plans to build 10,000 new houses will not bring down house prices.

Treasury says the effect of this would fade over time as private sector developers respond by building fewer houses.

Housing Minister Nick Smith said the advice shows Labour's housing plans are a gimmick.

He said people serious about high house prices need to deal with five things: the cost of land, the cost of building materials, cost of labour, cost of the infrastructure, and the cost of compliance.

Dr Smith said spending huge quantities of Government money on new housing will reduce the price by 1% at most and only for a short term.

Labour housing spokeperson Annette King said builders and developers had said cheaper houses could be built and housing costs brought down considerably.

Under the scheme, she said the Government would provide the funding which would be repaid when the houses are sold.

2) Insulation, heat issues for tenants 15/2/13 ODT

A major report on energy efficiency is highlighting a ''particularly problematic'' issue over fuel poverty and a lack of legal requirements for landlords to provide adequate insulation for many rental properties.

The report, titled ''Energy Cultures: Implications for Policymakers'', was produced by the University of Otago Centre for Sustainability and launched yesterday at a national conference on energy-related issues in Wellington.

The project aimed to examine the ''economically viable potential for residential electricity savings'', focusing on household behaviour linked to space heating and hot water heating.

Such heating accounted for about 60% of household electricity use and offered ''great opportunities for energy efficiency''.

But rental properties raised ''particularly problematic'' issues.

Landlords had ''no incentive to make energy efficiency investments like insulation'' that they would not ''enjoy personally'' or see reflected in higher rental income, and tenants had ''no interest in making alterations that will only pay off over time''.

But research showed rental properties were likely to be colder than other dwellings.

About two-thirds (65%) of all those New Zealanders aged under 65 who were in poverty were living in rental houses. For children in poverty, the figure was more than 70%.

There were ''no requirements'' for rental properties to be ''insulated or free from undue heat loss''. Only new dwellings were affected by the Building Act 2004.

Housing improvement regulations also required dwellings to be free from dampness, but said ''nothing about cold or heat loss'' and nothing in the Residential Tenancies Act obliged landlords to ensure properties were ''warm or habitable''.

An Expert Advisory Group on Solutions to Child Poverty had recommended the Government reconsider the regulations on the performance of rental accommodation.


3) $68m in tax reaped from property speculators 25/2/13 RadioNZ

Inland Revenue reaped nearly $68 million in tax from property speculators over the past three years.

Two thirds of the cases were in Auckland, but both the department and the real estate industry say speculation appears to be waning.

In the year to mid-2011, the department wrapped up 386 cases reaping nearly $34 million, but the number of cases has dropped steadily since.

The IRD attributes part of the decline to its efforts in educating property traders about their obligations.

But property investors and the real estate industry say that even in the strong Auckland market, speculators are much less prevalent than they once were.

4) House buyers may need bigger deposit 27/2/13 Fairfax

Rules aimed at taking some of the heat out of the housing market and providing greater financial stability could be agreed as early as the middle of the year, Finance Minister Bill English says.

Those rules are likely to include requiring home buyers to have bigger deposits.

In a speech to a business audience in Auckland today, English said the Reserve Bank would consult over the next few weeks on proposals giving it a greater ability to influence the amount of lending done by banks and other financial institutions.

These might include requiring lenders to:

  • Restrict high-loan-to-value ration lending in the housing sector.
  • Hold additional capital on their balance sheet as a buffer during an economy wide credit boom.
  • Hold additional capital against loans in specific sectors if risks emerge in those sectors

There were some expectations that these would be used immediately to dampen the Auckland housing market but those decisions would be in the hands of the Reserve Bank, English said.

English was asked whether he was concerned that the introduction of a cap on loan-to-value ratios - the amount of deposit required for a loan - would hurt small to medium-sized business owners who often used their homes as security on a loan to expand their business.

English said that if the move went ahead, it would probably only be used as a last resort by the Reserve Bank when lending well outstripped growth in the economy.It would not be used every day to "fiddle in the economy".


Tags: political report - annette king - bill english - david shearer - nick smith

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