MPs from Labour and National have clashed over whether upcoming tax breaks for landlords will lead to lower rental prices.
Tax breaks, in the form of interest deductibility, are being restored gradually to landlords after being removed in 2021.
As the term suggests, the interest landlords pay on a mortgage can be deducted from their rental income when it’s time to calculate their taxes. This means they pay less tax because their taxable income is lower.
The government hopes this will drive down rent costs – but politicians don’t all agree.
Speaking to Breakfast this morning Labour MP Ginny Andersen said Treasury have pointed out there “is no link” between lower rents and giving landlords a tax cut.
Meanwhile, Minister for Housing, Chris Bishop, said Treasury agreed the interest deductibility will put “downward pressure” on rent prices.
“That’s just not true,” Andersen said. “All it means is more money in the pocket of landlords and those renters don’t get passed on that benefit.”
Andersen said the $2.9 billion it will cost the Government is “not fair to Kiwis”, especially while the disability community is not “getting frontline services”.
Bishop doubled down and rejected Andersen’s claim again, and said the official advice from Treasury is it will indeed drive down rent costs.
“Well that’s what they say… you just said the Treasury said that doesn’t happen, if you go and read the regulatory impact statement it makes that exact point.”
“The facts are what they are.”
However Andersen said she had read it, and claimed it does not.
Bishop also said disability services weren't being cut, but funding was close to being exhausted and we are "looking to sort that out".
To watch Bishop and Andersen go toe to toe on the Breakfast panel this morning, where they also discuss Winston Peters and police pay, watch the video at the top of this article.
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