Reflection on the NZ Government changes for Landlords
Reflection on the Government changes for Landlords
As the year is ending, we are reflecting on the key changes and developments in the rental property market in New Zealand. The new coalition government has outlined some proposed policy changes, which indeed have significant implications for both landlords and tenants. Here’s a summary of the key points from our research.
Mortgage Interest Deductibility:
- The faster reintroduction of mortgage interest deductibility is seen as a positive gain for property investors.
- The phased approach of 60% this tax year, 80% in 2024/25, and 100% in 2025/26 is designed to encourage property investors to retain their properties.
Reduction of the Bright Line Test:
- The reduction of the bright line test from 10 years to the original two years is a welcome adjustment for investors.
- While it may not lead to a significant increase in property sales, it contributes to a favourable environment for investors.
Return of 90-Day No-Cause Evictions:
- The return of 90-day no-cause evictions has caused discussions, but it’s emphasized that good tenants should not be overly concerned.
- The comparison to car insurance is used to convey that landlords don’t enter tenancy agreements with the intention of termination.
Notice Period Changes:
- Reduction of the required notice period for tenants to 21 days (from 28) aims to facilitate smoother transitions between rentals.
- Landlords’ notice period for selling the property or renovations be reduced to 42 days (from 90).
Pet Bonds and Other Changes:
- The introduction of pet bonds is expected to make it easier for tenants to have pets, though the specific implementation is still being determined.
- Other changes include reducing the notice period for landlords and easing the transition for tenants between rentals.
It’s evident that these changes are creating a more dynamic landscape in the rental market, aiming to balance the interests of both landlords and tenants. The anticipation for a positive 2024 with increased investment and opportunities reflects a hopeful outlook for the rental property market in New Zealand. It will be interesting to see how these changes unfold and impact the real estate sector moving forward, but regardless, we feel more confident of a better process for you, our client.