New law a capital gains tax

Five months since the election and after having spoken in the parliament many times now, I finally delivered my maiden speech. The maiden speech is normally the very first time an MP speaks in parliament and is the opportunity to explain in an uninterrupted 15 minutes who you are, why you’re there and what you hope to achieve.

In my speech I spoke to the fact that regardless of whether you have lived 40 years in Cockle Bay or four years in Flat Bush, Botany people have all worked incredibly hard to get to where they are. It is that desire to get ahead, for ourselves, our families and our community, that unites us regardless of our age, ethnicity, language and faith.

No matter your situation, I believe in a New Zealand that backs Kiwis to work hard, to convert opportunities, to create prosperity for themselves, their families, their communities and our country. Because that is how we will make our country stronger.

With those beliefs in mind, it was shocking to see the government introduce – and make law immediately under urgency – an extension of the bright-line test from 5 to 10 years and the removal of interest deductibility for residential landlords.

The government tried to present Mum and Dad landlords as property speculators when the reality is the vast majority of landlords are hardworking folk who own one rental property which is part of their retirement financial plan. These changes will hurt them.

The bright-line test was introduced by the last National government to slow down genuine property speculators and flippers. Now that it has been extended to 10 years it is a de-facto capital gains tax. Yet, the government never campaigned on these tax increases and changes in the election campaign. I’m not sure that when the voters of Botany gave their electorate party vote to Labour this is what they were imagining.

We do have a housing crisis. Since this Labour government came to power, the average New Zealand house price is up $250,000 increasing 47 per cent, average rents are up $120 per week or 30 per cent, and there has been an almost four-times increase in the state house waiting list. The sums are even more eye-watering in Auckland as we all know.

The real answer is to tackle the supply side of the issue. This country is essentially the same land size as Great Britain or Japan who have infinitely bigger populations yet lower relative house prices. The number one solution is to repeal and replace the Resource Management Act. However, right now we need emergency measures to release land for development and boost construction as National did successfully in response to the Canterbury earthquakes.

Other shorter-term solutions include bringing the urgent rezoning of land by local authorities forward, remove the Auckland Urban Boundary, make Kāinga Ora capital available to community housing providers and establish a housing infrastructure fund to help local government finance the pipes and roads required to accelerate rezoning of land for greenfields developments.

  • Christopher Luxon, MP for Botany

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