Housing Minister Phil Twyford is confident Government legislation to ban tenant letting fees won’t result in higher rents.
The bill that would see the practice ended has been introduced to Parliament and Twyford expects to see it come into law before the end of the year.
He has also introduced a bill that would slap Auckland motorists with a 10c a litre fuel tax.
At the moment, tenants in rental properties can face up to four weeks’ bond, two weeks’ rent in advance – and one weeks’ rent as a letting fee – in addition to moving costs as a result of letting fees.
“Letting fees are an unjustifiable tax on renters,” he told media on Thursday afternoon.
“More than half of Kiwis rent these days and it’s a bizarre anomaly that the current law allows letting agencies to provide services to landlords, but charge tenants for them.”
Roughly half of all New Zealanders rent, he says, adding that the bill could put up to $47 million into the pockets of Kiwi families every year.
Twyford says he has no reason to believe rents will go up as a result of the move.
“In 2012, Scotland banned letting fees – there is no evidence that this will lead to any increases in rents.”
He says the Conservative Government in the UK has also introduced legislation to ban the fees.
“Generally, letting agencies only charge these fees when the conditions are such the landlords have all the power and tenents are on the back foot, it’s basically a way of gouging the renters and I think it’s time that it stopped.”
He does not know if National will side with the Government when it comes to passing the bill, but Twyford says both NZ First and the Greens are onboard.
A review of the Residential Tenancies Act is still underway.
Regional fuel tax for Aucklanders imminent
Meanwhile, the Government will on Thursday also introduce legislation to slap Aucklanders with a fuel tax.
The tax will apply to petrol and diesel and can be charged up to a maximum rate of 10 cents per litre, for a maximum of 10 years.
It will be paid by fuel distributors when they deliver fuel to service stations and commercial users inside the region.
Twyford says the tax will allow the Auckland Council to seek funding for specific transport-related projects within the city.
It is expected to generate between $150-$170 million a year.
“Under the Bill, Auckland Council must first consult with residents on the proposed projects it wishes to fund. It must then obtain Government approval before the regional fuel tax can be implemented,” Twyford says.
The legislation is expected to become law within the next few months and Aucklanders will be paying the tax starting July 1.
Although it is a new tax, it was not considered by the Government’s tax working group, chaired by former Finance Minister Michael Cullen.
This is because it was already signalled by the Government during the election as a standalone policy, Twyford says.
“It’s a quick and efficient way to raise some revenue for a desperately needed project and that is building a modern transport system in Auckland.
National’s transport spokesman Jami-Lee Ross says the tax is not necessary and has called for the Auckland council to rein in its spending.
“Auckland Council’s staffing expenditure has gone up by about the same amount that [the Government] want to tax Aucklanders more by.”
He says the council should “look seriously” at its budget, adding the tax is just an “easy out.”
When pressed, he says Auckland Council’s staffing expenditure is an “obvious example” of where cuts can be made to help fund the city’s infrastructure pressures.