The new government is planning to make changes that will impact both tenants and landlords. The National-led coalition has pledged to alter the way tenancies work, which has pleased investors but not tenant representatives.
One of the proposed changes is to allow landlords to end a tenancy without giving a reason, as long as they provide 90 days’ notice. This is a reversal of a 2020 law change. Sarina Gibbon, general manager of the Auckland Property Investors Association, compares this to an “insurance policy” for landlords. However, Geordie Rogers from Renters United argues that a more mature discussion about why landlords need to evict tenants without reason is needed.
The government also plans to shorten the notice period for tenants to end a periodic tenancy from 28 days to 21. Additionally, the notice period for landlords wanting to sell, renovate, redevelop or move into a property will be reduced from 90 days to 42. Gibbon sees this as a positive change, as it can help tenants avoid paying double rent due to misaligned tenancy dates.
The Act Party is pushing for landlords to be able to charge extra rent for potential pet damage. At present, landlords can’t ask for more than four weeks’ rent as a bond. While Gibbon believes more details are needed about this proposal, Rogers views it as unnecessary.
Investors will be able to deduct home loan interest costs from their rental income for tax purposes. While some investors believe this could limit future rent increases, Rogers doubts this relief will be passed on to tenants. Gibbon, on the other hand, sees this as a significant advantage for investors.
Finally, the government plans to reduce the amount of time investors must hold onto a property to avoid capital gains tax from 10 years to two. Some believe this could lead to more properties being sold, which Gibbon sees as a positive change for investors.
