Property Investors

PHOTO: The AM Show. The AM Show; Images – Getty/Pixabay/BNZ

One of the country’s leading economists says the Government’s tax changes have caused a “substantial decline” in interest in property investment.

Last month landlords were told they’d soon be unable to use interest payments on mortgages to reduce their tax liabilities, the Government saying it was a “loophole” that favoured speculators and investors over owner-occupiers.

Last week a survey of real estate agents uncovered anecdotal evidence fewer investors were showing up to open homes and auctions, and a new survey by former BNZ chief economist Tony Alexander has backed that up.

“Last month we reported that the announcement of a 40 percent minimum deposit requirement for investor purchases of residential property had contributed to a decline in the proportion of people looking at purchasing an investment property,” he wrote in the latest edition of his regular Spending Plans Survey.

“Now, following the March 23 announcement of a raft of new policies including removal of interest cost deductibility, we have seen a substantial decline in purchase intentions.”

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