Labour's plan to close loophole 'another tax'

The Prime Minister has dismissed Labour's proposal to close a housing market tax loophole as "another tax'' that will crimp home-building.

Bill English
Bill English

Labour leader Andrew Little announced the policy at the weekend.

Under his government, property investors would no longer be able to offset rental property losses against income from other sources.

Mr Little said Labour was going after speculators who set up multi-property portfolios, and the policy would bring in $150 million extra revenue a year.

But Prime Minister Bill English said it would essentially put up taxes on houses when more homes are needed.

He said Labour's policy of reducing visas would also cut into the construction workforce and houses would not be built.

"If there's one thing that's absolutely clear from the whole debate about housing, it is we need more houses, sooner, faster,'' he told Newshub yesterday.

The Government had already brought in its "bright line test'' to deal with people who turned over houses quickly, Mr English said.

Labour said the $150 million would go into funding insulation and heating to make homes warmer and healthier, providing grants of up to $2000 per home.

Mr Little reacted to Mr English's comments by saying the prime minister was backing the speculators who were driving first home buyers out of the market.

"By defending a $150 million a year handout to property speculators, Bill English is turning his back on Kiwis who just want a fair shot at owning their own home,'' he said.

"The tax loophole is turbo-charging the property speculation that has driven house prices sky high.''

Mr Little said one in seven properties in Auckland were being bought by big time investors with five or more properties.

"First home buyers are not getting a look in.''

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