Over 30 percent of property investors recording annual losses

A newly released paper has revealed over 30 percent of Kiwi property investors are recording an annual average loss of almost $9000, making no income from their investments.

The paper was prepared in December 2020 for Housing Minister Megan Woods examining the potential impact of the Government’s big housing policies, which were announced in March.

It shows 37 percent of property investors (107,530 taxpayers) reported an annual loss to Inland Revenue, with an average loss of almost $9000.

“Most allowable deductions reflect real cash costs to investors e.g. insurance, body corporate fees, maintenance,” the report said.

The 63 percent of property investors who reported profiting from their properties recorded an average profit of $14,000.

If the proposed changes (extending the bright-line period, limiting interest-only mortgages, removing the deductibility of mortgage interest and temporary rent controls) are implemented, the report said landlords may:

• Increase rent to cover additional costs
• Take their property out of the rental market
• Reduce costs by lowering maintenance
• Sell one or more properties.