Budget 2017 ‘families package’ includes Accommodation Supplement boost, more Auckland suburbs into top bracket; WFF payments raised; Bottom two income tax thresholds up

Budget 2017 ‘families package’ includes Accommodation Supplement boost, more Auckland suburbs into top bracket; WFF payments raised; Bottom two income tax thresholds up

By Alex Tarrant

Auckland landlords will be rubbing their hands with glee after Steven Joyce’s first Budget as Finance Minister, with the city’s ‘central surrounds’, Southern and Western suburbs being boosted into the top bracket for the government’s Accommodation Supplement (AS) rent subsidy.

Maximum AS payments were also boosted across the board in a move the government said was designed to help low-income earners with rising housing costs. See tables and regions below.

And while Joyce acknowledged there was a risk landlords bump up rents to take advantage of tenants with more money available to put towards rents, he issued a warning: the government would be keeping an eye out for whether the move is abused.

Families package

Joyce on Thursday revealed a ‘families package’ delivering 1.3 million families an average $26 weekly after tax income boost by shifting income tax thresholds, Working for Families (WFF) and Accommodation Supplement (AS) payments.

Changes include boosting the bottom two income tax thresholds:

Lifting the 10.5% tax bracket ($1-$14,000 previously) to a cap of $22,000.

Lifting the 17.5% bracket ($14,001-$48,000 previously) to $22,001-$52,000.

The 30% tax bracket will now be $52,001-$70,000, and the 33% bracket is unchanged at $70,001.

The government Independent Earner Tax Credit will be discontinued, the WFF Family Tax Credit rates for young children will increase to the level of those for children aged 16-18, and Accommodation Benefit payments for eligible Student Allowance recipients will be raised by up to $20.

Along with Accommodation Supplement boosts, the set-piece moves will cost roughly $2bn per year. It will “provide better rewards for hard work, help lower-income families with young children meet their living costs, and improve incomes for people with high housing costs,” Joyce said.

“The measures in this package are expected to lift 20,000 households above the threshold for severe housing stress, and reduce the number of children living in families receiving less than half of the median income by around 50,000.”

West, South and Central Auckland surrounds bumped up

“The Accommodation Supplement maximum payments will be increased to better reflect the increasing housing costs that lower income families face,” Joyce said in a fact-sheet on the changes.

Maximum AS payments will be boosted by between $5 and $80 nationwide over the four ‘area’ brackets individual suburbs come under.

Central and Northern Auckland remain in the top ‘area 1’ bracket and will be joined by ‘Central Auckland surrounds’, South and West Auckland, Tauranga, Queenstown, Wanaka and Arrowtown.

In ‘area 1’ a one-person household maximum AS payment will be boosted from $145 to $165, a two-person household from $160 to $235 and a three-plus-person from $225 to $305 per week.

Moving in to ‘area 1’ to join central and Northern Auckland from ‘area 2’ are Southern and Western Auckland, and ‘central surrounds’ suburbs:

Bombay, Clevedon, Glenbrook, Hunua, Karekare, Kaukapakapa, Kaukapakapa rural, Kingseat, Muriwai Beach, Muriwai Valley, Pautumahoe, Pokeno, Pukekohe, Rewiti, Riverhead, Tahekeroa, Mahurangi, Parakai urban, Helensville South, Waitakere West, Helensville, Warkworth, Snells Beach, Waiheke Island and Waiuku.

‘We’ll be keeping an eye on landlords’

Joyce told media at the Budget lock-up in Wellington Thursday that the government will be keeping “a close eye” on whether landlords move to bump up rents in response to the AS caps being raised.

While this was a risk, and often raised as a possibility, Joyce said experience showed this hadn’t happened in the past.

Below are Treasury’s statements on the package’s impact on family incomes

Tax threshold changes and discontinuing IETC

The tax threshold changes provide a tax reduction of $10.77 a week to anyone earning more than $22,000 per annum, increasing to $20.38 a week for anyone earning more than $52,000 per annum.

These changes are likely to increase work incentives. Working families and individuals not receiving a benefit will gain from the tax threshold changes if their individual incomes are above $14,000.

Individuals who receive the Independent Earner Tax Credit of up to $10 per week will be fully compensated by the increase in the $14,000 tax threshold. Only 32 per cent of those eligible claim this credit during the tax year.

New Zealand Superannuation recipients will gain from the tax threshold increases, and from the link between Superannuation rates and after-tax average wages.

Changes to Family Tax Credit

Eligible families with children aged under 16 will gain further from the increases to the Family Tax Credit rates for younger children.

Family Tax Credits increase by $9.25 a week for the first child under 16, while credits for subsequent children increase by between $17.75 and $26.81 per week.

A small number of families may be disadvantaged by the changes to Family Tax Credit abatement settings but in nearly all cases this will be more than offset by the tax threshold changes. Transitional assistance will be available for any families experiencing overall losses of more than $3 per week as a result of the changes across the Family Incomes Package.

Changes to accommodation payments

The maximum Accommodation Supplement rates for a two person household will increase between $25 and $75 a week, while larger households will gain up to between $40 and $80 a week in accommodation support, depending on where they live. In addition, the make-up of the four Accommodation Supplement areas will be updated so families in areas where housing costs have increased the most will receive further gains.

Families and individuals who are entitled to receive Accommodation Supplement at the maximum payment rate will gain from these changes.

Student Allowance recipients who are eligible to receive Accommodation Benefit at the current maximum weekly rate of $40 may now receive up to $60 per week. This will help around 41,000 students with high accommodation costs.

Below is the 'High Level AS Changes' sheet handed out by Treasury at the Budget (it's not available online):

Below is the table for new payment maximums for the areas above:


We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Its like a dystopian nightmare. Could they at least try and hide the fact that they are doing everything in their power to encourage investment in property while simultaneously stuffing the FHB.

But you and many other commenters were saying FHBs should hold off buying? they have been waiting for 4 years now and they will be kicking themselves. When is this absolute property crash supposed to be happening? Bit like game of thrones "Winter is coming".

People said a crash would happen, but it hasn't, therefore it can't. Mike Hosking.

There is always the possibility of a crash. But a crash from here wouldn't mean people who bought 2-3 years ago would be rendered homeless.

Crash ?

Just what on earth would cause a housing market crash when we have over 1,000 new faces arriving here EVERY FIVE DAYS ?

Thats every five days for the past year day in and day out and there is no end in sight , they just keep coming and coming and coming and coming and coming , and they all need somewhere to live.

And it seems many are buying cars , with 400 additional cars being registered to Auckland addresses every month , that rate will double the number of cars on the roads in a few short years .

Add this to the lowest interest rates in my lifetime , and banks awash with cash to lend .

There is no immediate risk of a crash , although I wish there was because we need 3 houses in Auckland for our young adult children

I never said there was nothing wrong with with these immigration levels. Personally i think its disgusting but in some cases necessary. I want a penthouse apartment in New York but you don't see me complaining about their prices. But yeah i hope your children find something. Hopefully more options will be there shortly.

The great myth is that Auckland prices have increased largely because of migration. If that was so then rentals would have also doubled. In fact a small rental increase has resulted in higher number of people per household. The reasons prices have gone up is because people believed prices would go up. And as they increasingly realise that cant go on for ever they will start to exit - which is what we are starting to see now. I don't think that there will be a whole 'crash' but I did predict house prices would fall by 10% by around now, and I predict they will fall by another 10% by the end of the year. After that house prices will stay stable for a very long time.


Rents are constrained by locals income levels.
House ownership is on a global market pushed up by foreign-related purchasers,
as well as high immigration levels.

I think another myth. I also suspect that overseas interest in Auckland property was based on the fact it was going up in value. When it stops going up in value then that interest will disappear. A ponzi scheme is a ponzi scheme.

Bang on mate. Easy (ier) credit = escalated purchase prices


surely people are not stupid enough to see who the increase in accommodation supplement goes to?
this increase will do nothing but increase rents what then?

fear not sharetrader..all is in hand ..

"he issued a warning: the government would be keeping an eye out for whether the move is abused"

same as the RBNZ does with banks interest rates, maybe they could share the same wet bus ticket

Consider me reassured.

In Kaikohe where the rent is $260pw people have gone from getting $75 to now getting $160 pw in AS. Surely they deserve it! After all who is paying for it?
Surely landlords don't deserve it, it needs to go to dole bludgers in the crime capital of NZ! That is who truely deserves it.......


Ponzi prop up. Wow.


They'll keep an eye on landlords and maybe say some words to appease the population if it all ends up in their pockets.

In summary: tax cuts for everyone (at least mostly targeting lower income earners) and more money for families so they can give it to their landlord. Where's the health and education spending? Where's the funding to try to reduce the suicide rate?

I'll have to have a look at this later and see what they're budgeting for debt servicing and repayment.

They forget that the role of the government is also social services.

Where oh where is the mandate for government to provide social services? Government via parliament is to uphold the constitutional arrangement it is not and was never intended to provision social services that was a poltical party dreampt up rort from decades ago.

Once upon a time all social services were local and from voluntary contributions.


Instead of propping up landlords via supplements because "housing costs have increased," why not attempt to make housing more affordable? Placing the cart before the horse methinks.

I guess targeting supply didn't work so good for them so they've moved on to subsidies.

Exactly, if they progressively wind down the accommodation supplement and instead use that money to build a shit ton of houses, both rents and house prices would drop.

2 billion dollars per year is enough to support the building of 128,000 homes.

Boom - you've got it. A bunch off Darklords would realise their business model sucks and they'd be forced to sell up. Prices drop. More young families get to buy their own homes at affordable levels.

But that would require a short period of pain for Nationals voting block, that for whatever reason we're not willing to experience as a country (yet) for the greater good.

The government does not want afforable housing. If the price was to decline then NZ would be facing much uncertainty on the economic front.......demands from banks so mortgages aren't underwater and/or within the RBNZ LVR's and other policies could plunge NZ into an OBR event........surely this givernment is wanting inflation?


Jawbone-Joyce will keep his eye on landlords .... har har

Well Mr Joyce let me tell you that if all landlords play the game and do not increase rents the tenants themselves can bring you undone by re-arranging all the deck-chairs themselves

A 3 person household in a Zone 1 area will now have an extra $80 pw in their kick which will enable them to move or change rental places to a more comfy, warmer, drier, nicer place at a higher rent and there is nothing you will be able to do about it - especially if the ripple effect kicks in and they all move


While this was a risk, and often raised as a possibility, Joyce said experience showed this hadn’t happened in the past.

Good call. There has been no evidence that landlords have ever shafted their tenants. Nope, its never happened. No sir.



Who was that famous guy who held a telescope up to his blind eye - the one with the black eye patch

Couldn't see a thing

You're thinking of Horatio Nelson, the commander of the British fleet at the battle of Copenhagen. He put his telescope to his blind eye, and declared he couldn't see the command to disengage from attacking the Danes.


My god...ridiculous showing from Joyce.

Is he looking to become the next Nick Smith?

National is asking taxpayers to give part of their income to pay yet more to property investors. The way this party is now pandering to older voters...crikey, Clark may have led the 'Nanny State', but Bill is fast creating a 'Granny State'.

Buy a house. Sorted.

Yes, commit (in auckland at least) to buying into the overpriced ponzi at 12 times median pay...Whats the worst that can happen?

I think even the government has started talking about the fact that won't be an option for many in Auckland. How are people on less than the median income - or even the median - to buy a house?

But in the meantime, the taxpayer contributes to pushing up everyone's rents through accommodation supplements, while we also contribute to lower wages by supplementing them with Working for Families - or "communism by stealth" as our great Lord and Saviour John Key called it (before getting in power, obviously).

it seems , all these will be implemented from next year 1 April , till then count the numbers

it seems , all these will be implemented from next year 1 April , till then count the numbers

The Government may need rent control to prevent unscrupulous landlords rorting the AS

I'm thinking the RBNZ will adjust the LVR's for landlords which will see any rent increases gained end up as tax back in the system! If one has to use income to pay down debt then that debt reduction is taxed.

I think the accommodation supplement should go completely. But today National won their fourth term.


In the name of poor Support and promote Landlords.

This is national way of telling the so called investors / speculators that do not worry even if we are not able to help by boosting house price being election year atleast will try to get you get more rent.

Whatever national does is ultimately to help the rich.

All this in the name of helping lower and middle class.

Think and Vote

"Think and Vote" who for?

In NZ we like every other jurisdiction we vote for the best of the worst.


This is National way of saying Thank You to all investors / speculators who has and have been supporting the housing Ponzi by increasing the housing supplement.

As the hose price have stabilised and national being election year not able to do much to boost and support speculators and so called investors is giving them some hope that have patient and be happy with this extra money that you will receive and wait till election gets over.

"We have this strange thing that you don't see anywhere else in the world (question: except New Zealand?!) with property investment. Two million people had investment properties in 2013 and I'm sure it's much higher today, 40,000 had six or more. Supposing we had some disaster and people will try to sell one of their investment properties. If it's a real disaster they will stick the other five on the market and see which one sells. Many of the others will do the same thing and we will have our moment of correction."

Of course, the 'real disaster' may not come, but what if it does?

Election Year

The moment FM said that on this year budget their will be no lollies.......Knew .

How to support their vote bank in disguise of helping poor and middle class is an art and who else but National.

Will they get vote for this. Have doubts.Too Little too Late and What after getting the vote for all this is just to get the vote so can rule for next 3 years and finsih whatever little is left.

This year has to be vote for change.

Hi all - I've uploaded a Treasury sheet on High Level AS changes - couldn't find link online so took a photo! I circled Kapiti Island whilst in the Budget lock-up as I thought it was a little odd you get an Accommodation Supplement for living there...

Rent review time?...

Rant review ?

Well I know I'm gonna get it from this crowd but I thought that an Accommodation supplement boost would be a good thing for renters and that lifting the lower 2 income threshold (= paying less tax for the lower income earners) is a good thing too. It even sounds like a Labour budget

The accommodation supplement will give a boost in the short term. Those that receive it the money will be a welcome boost.

The lower tax thresholds really did need to be boosted. The lowest received a good increase.

Those are positives but I do question the effectiveness. The other details of the budget are more interesting.

I agree. Tricky balance, right. Perhaps it is just a transfer to landlords... but tell that to tenants whose rents may go up regardless.

In the very short term it may benefit those at the bottom. But directly after that, all rents will likely rise in response. If you're earning too much to receive Working for Families, or if you don't have kids...Well, the prospect of a rising tide lifting all boats won't be good news as rents continue to rise in response.

Alex, your title "Budget boost for landlords" shows you're not impartial. Surely some rents will rise, some would have anyway risen anyway. How different would the headline sound if it stated "Accommodation supplement boost for tenants" which is, after all, what is happening.


You're saying it doesn't have a distorting effect on the rental market?

Essentially, we're increasing the $2 billion already given to property investors every year through a failure to property manage social housing needs.

I'm saying: "Alex, your title "Budget boost for landlords" shows you're not impartial"

He's calling a spade a spade.

Following the money, given the type of rentals, most money will support back to the banks.

Jobs and income. I meant income from the jobs.
But hey, the folk that need it now don't need a pay rise.
Productivity who?!

Error no he's not, he's calling "boost to Accommodation Supplement" "boost to Landlords pockets"

Rents are set at what the market can afford. Giving more people money to spend on rent is going to allow the average market rent to shift higher. Ultimately this money will end up with the landlords thus creating 'a boost to landlords' pockets. Don't let the blue dye cloud your vision and be so obtuse.

I mean you'd need to be pretty naive to think otherwise

He didn't say "Accommodation supplement boost for tenants", because it's pointless.
If you can't understand that the true effect will be an increase in rents, you're better off reading the herald.

Alternatively, he could have written, and more accurately, "Accommodation supplement for a few, higher rents for everyone".

Thanks for your help nymad

Ok, so what would most of you have wanted Mr Joyce to do?
Reduce the accommodation supplement?
He can't win either way with all the bloggers that want house prices to drop to nothing so that investors or speculators go broke!
What did you want Mr Joyce to do for people that don't own their own home and can't afford to buy at the moment?
Bring in a land tax?
News is that there has and always will be people,who,rent for life for various reasons!

Give the money to social housing providers to build new houses.

That would make practical and financial sense, and benefit working people who don't loiter about slurping drinks in the Koru Club, so clearly it is out of the question.

Better to spend the $2 billion plus per year on this rather than on donations to investors, yeah.

Exactly, $2 billion per year supports the manufacture of over 120,000 homes. That s a shit load of new job created. That's a shit ton of new house built to lower rent and housing costs.

If one really wanted to lower house prices it could be done but not through social housing providers.....
You have to deregulate the market.......but the trouble is very few, especially the cowboys inside the bureaucracies will allow deregulation.......they know that deregulation would remove them from their place of priviledge they have created and if they don't keep their priviledged position then they might find themselves outside in the cold building houses..........so they will keep advising the Ministers of every problem they can come up with, they will ensure that facts and figures only ever present themselves to keep their created system running.......none of us can change the system.....so the next best thing is to play in the system........all the money that the government is playing with was never their money......the rightful owner is the person who paid the money.........when one can't stop them from taking their money then the next best thing is to get as much as you can back from them...........you won't sove the problem by building more social houses.......you solve the problem by building affordable houses............

yes do away with the accommodation supplement and channel the 2 billion a year into building houses
some for social housing, some to FHB
and while your at it set up an apprentice program that contractors that win the work have to contribute too to get our young into jobs

far better use for the money than putting in landlords pockets so they can pay overseas banks interest

And how exactly does that help current tenants?

Now that is a very good question - Can someone come up with an answer to that??

They can get off the dole and go out and get a job on a building site, or they can continue to suck on the teat and expect everything to be handed to them because they feel disadvantaged.

Are you being sarcastic or do you feel that way really? You're implying that everyone who rents is on the dole and has no job. In actuality, if that were true, they wouldnt be a tenant, they'd be homeless... b/c Akld rents arent exactly cheap as chips.

Well $305 per week isn't exactly cheap as chips either. Or should the few remaining taxpayers be expected to pay the entire rent for everyone who wants to live in Auckland? More money for the most inept members of society, taking from the competent, creative, motivated and intelligent, to support an ever growing mass of moaners and complainers and that mass is growing at a horrendous rate.

Let's be clear - you are categorically stating that people who dont own houses are 1) dole bludgers and now 2) inept members of society.

What a skudiv.

I've lived among people who live off of handouts, and I've discovered first hand how selfish, useless, greedy, resentful and lazy they generally are. Here they are getting more for nothing, and proving how generally unfit for civilisation they are, by trying to bite the hand that feeds them. They contribute nothing, but breed like flies. If it were up to me I'd give them nothing. It is madness to think that rewarding these people for their actions, will in any way improve our country. I guess if we are being clear, I'm referring to people who live off handouts, but I'm not fond of carpetbaggers either.

Skudiv, I have lived among the opposite types of people which you describe. One could possibly, these days, describe them as fascists. They imposed strict gender roles within their families and insisted on obeying rules even when they could get away with breaking them. They focused on healthy living, academic achievement and hard work. Indeed work sometimes even came before family as if it was a spiritual thing. However they would stay married even when the going got tough. After work the welfare of the children was their highest priority.To be sure they were exclusive and discriminating in their habits and who they associated with but they were always there when they were needed. You knew they would unhesitatingly risk their lives if they saw your children in danger. If you were in a battle these are the people you would want by your side. They were obsessive about not being a burden to others even in the most minor way such as making too much noise or being messy, dropping litter or jumping a queue. Being a good neighbour was a high priority. They would think about animal welfare and the health of the planet always doing their best to recycle and not be wasteful. Even little things were noticeable like being sure to stop at the end of the driveway to check for pedestrians on the footpath. They would fill their lives with quality things and have immaculate gardens. They were always looking into the future and preparing, always thinking about the ramifications of any personal action. These people always seemed to be strangely successful.

What a complete load of horse hockey that is. You made every bit of that up to justify some sort of warped ideal you have of yourself, the dead giveaway being the third sentence.

Well, I'm pretty much describing Zachary's experience of life with the Robinson family. Another production that explores this theme is the Tom Cruise movie, The Last Samurai.
I'd be interested in other people's "I've lived among these people" recollections.

that is simple , take away the subsidy then what happens,
people would not be able to afford the rent you say, correct
so what is the landlord to do if faced with a situation of not enough Good tenants that can afford his rent hmmm
three choices, meet the market and lower to a level he can get Good tenants
leave empty or sell
if he sells you will say one less rental house , correct BUT not one less house which someone will purchase to live in.
a subsidy is always going to distort pricing and favour one group over another, and most people do not see who is the real beneficiary of the subsidy, which is not the first receiver

Yep. Most people getting a few extra dollars with the adjustment to the lower tax brackets, so far so good. But extend subsidy to landlords, they all put the rents up, so all of that money gets sucked into the black hole of landlords' interest-only loan payments, and the real economy carries on being starved of disposable income.

Most people will only see the bad in things, give free money to people who don't do anything for anyone, and they still grizzle like ungrateful POS.

Oh boy:

"Joyce told media at the Budget lock-up in Wellington Thursday that the government will be keeping “a close eye” on whether landlords move to bump up rents in response to the AS caps being raised."

And what will they do if they catch the naughty landlords. Nothing I bet! At best they'll jawbone about it. This is a little like in the US where the big farming companies use subsidies to buy out the small family farms. Here the landlords will use the accommodation supplement to buy out all the owner occupiers.

I'm really surprised by this as the national government initially highlighted the distorting effect of the subsidy. I guess they have no choice given demand pressures and supply failure.

They will convene a committee to study the issue for the next two years before concluding "there's nothing to see here folks, but we need to raise the accommodation supplement again".


A hand-out for the grasping layabouts who rent out damp hovels and squeal like piggies when it's suggested they should reach minimum standards? Whoever would have seen that happening.

Here is my take on why rents will hike and hoover more than just the accommodation supplement increase. Many rentals even now, are being almost auctioned to the highest bidder. Add that new app for that and the extra money and hey presto you have rent increases and the landlord will have done nothing to get it. Others might try to justify it by claiming the extra costs in insulation, EQC levies etc.
Make no bones about it, landlords are going to be the biggest benefactors in this. Cynical.

Oh, but you do have to give credit where credit is due, a master stroke from Joyce in sorting out two problems in one fell swoop, that is the prison budget and mental health budget. Best part of a billion dollars going in to new prison beds and we all know where many people who should be being supported by mental health services end up, don't we?

More money for FHB savings, boost to KiwiSaver contributions or cover slight increases in mortgage payments.Maybe more for ciggi's or rtds for some $44 a mth nearly covers basic sky tv or $80 mth 6 bottles of vino or 3 boxes of beer. Call it bribery if you want money talks.....nothing is good nor bad but thinking makes it so. Well done to Mr Joyce's jiucey tax package.Smart vote booster.

If Labour came up with the same budget, they would have paraded as Heroes and savers of the poor !... Listening to the opposition barking slogans and nonsense in parliament today was nauseous ...
Pity that most here are adamant to demonize property investors and create a virtual enemy out of thin air ... AS has always been there, and these boomers and investors and the laws allowing tax breaks etc existed 40 years ago, they did not change during the last 9 years of Labour rein - so all of this hypocrisy is shameful really ... and all this crying about the suffering of the poor etc is so blatantly obvious exploitation of some people's misery using sad drama to pray on voters' emotions!!

The country is doing well and yet the Opposition don't want to celebrate that, instead they looked like idiots trying to ruin a good party - Silly really!!

I think that the Nats have probably improved their chances today of winning the next election. ---- Good time to buy a property now, I reckon.

Inequality environment does create enemy, Rift and it had been created by national.

This budget is not because national feel for the commoners but is trying to buy vote by manipulation.

You see I have an issue with using strong words like Manipulate, Mislead etc ...
For all who are towing this same line, look around you and observe how the problem of inequality is an epidemic all around the world, specifically all around the western countries ... a natural result of pumping huge amounts of money in the form of QE and keeping interest rates super low, banks hoarding money, and the explosion of real estate and tangible goods asset classes ... we are no exception.
People on middle and high income were left with very little choice when it came to preserving the value of their extra cash and the best asset class easily available was realestate. ...
Anyone believing that Labour or others will have a free hand to do what they like without the blessing of "International financial powers" is quite naive.

So throwing more election lolly pops by Labour or others will not make them better leaders - they desperately want the power seats back now that the economy has turned around and they could smell the money - all they are interested in is to apply their agendas of socialism and punishing the ones who did better than others ... an outdated and backwards ideology really !!

This budget is as good as it gets to date and honestly it wouldn't have happened if it wasn't for all this inflow of students, tourists, and investors pumping billions in the economy in the last 3+ years.

The world is moving ahead and the opposition is still swimming in the gutters...!

Truth is bitter.

Government is taking away not only the house but even the dream of owning a house for the family and THAN to expect even not to express is not acceptable.

The words come naturally.

Many are hurt by the words but not by action or inaction of the government Lol.

Government building houses for people is not a great idea.
State housing as it currently exists is a failure.
Look at the way the average tenant looks after them, in fact doesn't look after them?
Providing houses and charging cheap rent just builds total dependancy on the country taxpayers and that breeds more dependancy!
Problem is that we have so many people that think they are owed a living and it is their right to demand everything without any effort from themselves.
That's right it is why we have a welfare system isn't it!
Well, it can't continue as NZ can't afford it.
People need to have to earn their own living and if you can't afford toprovide for yourself then why on earth should you expect the country to provide for your offspring?

For once, I fully agree with you on most points.
We should most definitely be trying to minimise the welfare state.
And, development should definitely be entirely private. Just look at the level of competence in the public sector for evidence of that. I mean, it bewilders me how Paula Bennet, Stephen Joyce, and Brownlie can even organise themselves to get to the bakery every morning. But, evidently they do. Likely multiple times per day, by the looks of it.

You make a very good point though, that is at the heart of the issue, "People need to have to earn their own living and if you can't afford to provide for yourself then why on earth should you expect the country to provide for your offspring?"
At even more fundamental is the fact that you are a hypocrite by saying so. Because you yourself are a huge beneficiary of the welfare state/a tax payer burden by virtue of the fact that you are a landlord.
So, it's okay to seek transfers when they are for yourself, but not when others seek them?

If that's your concern make them build their own house, enable them to own it instead of being permanent renters.

It is far cheaper for the government to provide AS than invest billions in building new houses to house low numbers of people. The debt servicing costs, maintenance etc of those houses if built would far exceed the AS being provided. Government is simply using private property investors to fund, maintain and manage rental stock required for people who need to rent. I know some will say lower house prices would solve the issue but in reality even if house prices halved the majority of renters would still not be able to afford to buy on their incomes. Some people go on about investors getting such low yields that they must be speculators. But your alternative, having government invest in new houses will be a much lower yield, produce a massive loss and cost far more than the AS. Government can not afford to house people without the investment of private landlords

Exactly ... very well put

NZ's history shows the use of government builds more than once as one factor in creating the once affordable housing that NZ had.

Nothing wrong with the idea that private developers be involved in creating supply, but it seems we're generally seeing them not building new stock. And indeed, they seem to benefit more by capturing existing supply than creating new supply.

The problem is, we're spending billions on payments to investors, when we could be increasing supply while NOT driving rents up for average renting Kiwis.

Exactly - and investors see this as a monopoly so to them reducing supply is a good thing and means they get higher capital values and can charge more for rent. The country has created a government backed housing monopoly - and instead of regulating and fixing it, they're backing it.

Don't disagree with your NZ history statement, problem is the world has changed since then and the horse has well and truly bolted on this one. Think of the billions the govt is saving by not having to provide the houses themselves. The AS is a far cheaper option and it is way past the point of being able to change that. Probably 20 or 30 years to late. Imagine if all private landlords said to govt ok you can buy all the houses at 60% of market value. Govt simplyy couldn't afford purchase cost, yet alone maintenance, management costs, and rental loses not covering expenses.

If that's the offer on the table, most will be purchased by the current tenants.

Look, 2 billion per year and rising is enough to build 120,00 homes. Once built you sell half, and rent the rest. You've now dropped you annual costs to 1 billion per year. use the 1 billion saved to fund the build of 60,000 homes. sell half of them, and use that 500 million to build 30,000 homes, etc etc.

Now look at what you've achieved. You've built 210,000 houses. 105,000 have gone to owner occupiers, providing security and peace of mind to many family's. 105,000 rentals at your disposal to control the cost of rent throughout the country without the need for more regulation, taxes or supplements.

It's called getting shit done. Something National cannot do.

On top of that you've also freed up 210,000 existing homes to find new owners/renters.

Win win win

Most tenants disposable income would not even come close to being able to achieve saving a deposit on 500k plus house. Ive worked with many of them and most are living week to week or worse day to day, yet alone service a mortgage, rates and maintenance. A lot of NZers are really unaware of lower income NZers reality when it comes to finances, disposable income just doesn't exist. Your figures don't add up land isn't free and neither are borrowings and everything else that goes with it. Its to bigger job that's why govt needs private investment

The problem isn't really investors it never was previously. The problems started with excessive immigration and foreign money particularly Chinese fleeing China. If both these were managed properly we wouldn't be having this discussion. Cheap money is a double edged sword as it has also contributed to the problem but if immigration and foreign investment had been managed properly in the beginning, cheap money could have benefited all NZers

Ah, but all the crown land being touted for development is technically free. It's already owned by the taxpayer and has been for decades. Inflating that land to today's prices and passing it through the private investment channel only makes affordability worse.

Even if it is all crown land and not having to purchase any privately owned land you still need to develop it. Then find tenants with the deposit required to apply for and have approved a mortgage based on their income. If they get that far they then need to service the mortgage plus rates insurance and maintenance. Then the biggy once you go from renting to owning you no longer get the AS! Nett result worse off financially owning than renting. Lets not forget many many people choose to rent for very good reason.

Nymad, don't know how you can call me a hypocrite at all!
We do own a lot of rentals but we totally check out all tenants thoroughly before accepting them, including work history etc.
From memory we would only have about 5% of our properties that is pretty much welfare reliant.
Every other one has people working and wouldn't think they rely on accommodation supplements etc.

"From memory we would only have about 5% of our properties that is pretty much welfare reliant."
So, aren't you a beneficiary of the welfare state, then?

Also, I'm not only talking about tenants on welfare, I'm referring to the tax advantages you have as a landlord.
That is a burden on the state. On all tax payers.
Your hands are far from clean. Especially when you vehemently oppose revision to the tax system.

He means you personally, as you're unemployed and don't work for wages, nor run a business or company that pays tax and employs people.

Wildcard you are talking rubbish.
I run a business it is a rental business providing accommodation that wouldn't be there if it wasn't for investors.
I pay tax on every single property and I also employ many people to do the various things that need doing and they pay tax.

The house would still be there TM2 - just owned by a young family., probably purchased for a lot less.

Unless of course you're claiming that Darklords only build and rent new-builds? (Which I know isn't true)

Well said THE MAN 2 , and so do most landlord nowadays - ... simply because they want to minimize their risk in a very low return environment - and stay away from tenant who will treat their property as they treat HNZ ones !!

Most people here have no clue about what it costs landlord to provide accommodation in the form of rental properties - All they can resolve is the amount of rent that goes into the landlord's' account every week -- they also forget that only a small portion of the entire rental properties are actually occupied by people receiving AS ( i.e. on the DOL) ...

Ecobird, what it costs landlord to provide accommodation.
Are you building specific rentals and then renting them out?

What are the costs you are thinking of?

If they are NOT building them, just buying existing they add absolutely zero.

Just out of interest, Man, how much of your income is from capital gains that are tax free. I.e. how much of your portfolio have you been running at a loss with capital gains the unstated (and un-admittable for tax purposes) intent?

Or are your more of a yield investor with positive yields and income, and paying income tax on that, and no real expectation of capital gains?

I'm pretty sure he/she mentioned previously that rent covered interest on 'most' of his/her properties.

Rethinking my question, I guess it would not be a good idea for a property investor to admit they're in it for capital gains on a public forum...might that affect their tax liability?

Capital gains is still a big part of it, whether a solely yield-focused landlord admits it or not. It's the mechanism as to how they can lever more equity to buy more investment properties.

No income from capital gains at all Rick, as we don't sell.
We buy good property for good yields and maintain the properties as it is our livelihood.
Yes all properties are positively geared, some are marginal some years depending on what maintenance we have done on them.
It is not all beer and skittle being a full time landlord and any financial rewards that investors receive are normally well deserved.

Yes all properties are positively geared, some are marginal some years depending on what maintenance we have done on them.

Does this mean that you mix revenue account and capital account items together? For example a heat pump lasts for more than one year, curtains etc..
And no sign of a sinking fund.
Do you ever renovate?, you know add an en suite or kitchen island & storage?

I ask because I looked at a 4 bdrm home last month. In a family suburb. Every thing was well maintained, as thou it was 1965!

The CV was $650k, it sold for $566k. The vendor thought themselves lucky. See the cv assumed that the place was periodically being updated, not just lick of paint or maintained.

NZ's property pyramid will make a fine Netflix doco when all's said and done.

This is totally absurd, now that we have let property speculation run on, the tax payer is forced to cough up so that people can afford the rent, and landlords can get better yields in the now more capital intensive property market.

Meanwhile a high income earner such as myself sits here unable to afford a house, and bleeding 45-50% of my income by way of income tax, student loan, and gst.

I don't need the $20.00/week gain in my after-tax income. I would rather the government give the money to struggling FHB's and young families who have been trying so so hard to save for their homes. High income earners should be taxed A LOT MORE to provide more relief for the low income earners, the homeless, the unemployed and those who have disabilities and can't work. All properties in high-end suburbs in Auckland (including my own in Remuera) should be capped at selling at 20% BELOW the 2014 CV's to keep our house prices under control.

I massively underestimated the strategic and charismatic electoral talents of Jeremy Corbyn himself. No matter what happens from here – and there is, remember, still a fortnight to go – you have to give the bloke credit for getting Labour to here..... he has persuaded hundreds of thousands of electors that the fight is not hopeless.
To succeed, in the space of just over five weeks, in pulling the Labour Party back from historic annihilation to unique political upset is an astonishing achievement.

The next UK Budget could be interesting!

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