What changes lie ahead for landlords and tenants under a National-led coalition?

7 December 2023

Handing keys to a tenant

 

With Christopher Luxon officially sworn in as New Zealand’s next Prime Minister, the new government now poses a number of changes for tenants and landlords - many of which will benefit property owners and investors.

90-day ‘no-cause evictions’.

2020 saw new regulations introduced that meant landlords lost the ability to end tenancies without providing a valid reason and a 90-day notice period. Under a National-led government, landlords will regain the right to terminate a tenancy without cause. This will ultimately safeguard landlords against bad tenants who would otherwise be difficult to evict. 

Notice periods.

The new government plans to reduce the required notice period for tenants to end a periodic tenancy from 28 days to 21. Regulation changes will also include a reduction for landlords who want to move into or sell their property, undertake renovations, or redevelop from 90 days to 42. Sarina Gibbon from the Auckland Property Investor Association says it’s worth noting that tenants can always choose to provide a longer notice period and landlords can also agree to a shorter timeframe.

Periodic tenancies.

As well as shorter notice periods, National will look at ending the automatic rollover from a fixed-term tenancy to a periodic tenancy. Unless other arrangements are made by landlords and tenants, current laws require all fixed tenancies to switch over to periodic terms once the agreed timeframe expires.

 

Golden Retriever

Pet bond.

With the Act Party joining forces with National, a higher bond payment for tenants that come with pets is back on the table. Currently, landlords cannot require more than 4 weeks of rent to hold as a bond. While more details are yet to come, new legislation will likely be introduced within the next year.

KiwiSaver.

One of National’s campaign promises is allowing Kiwis under 30 to use their KiwiSaver to pay for their bond. National MP Chris Bishop has said “Getting together up to four weeks rent in advance for a tenancy agreement is not easy for many people, particularly for students and young graduates who don’t have a lot of cash. Our policy will mean that people who have some money saved in KiwiSaver accounts will be able to use that money to pay the bond for a rental agreement”.

Mortgage interest deductibility.

Property investors will welcome the ability to deduct home loan interest costs for tax purposes from their rental income. While some are concerned it could limit future rent increases, it is unlikely tenants will see any form of rent relief from this. Gibbon’s has called the move a game-changer. “This is going to move the needle the most in terms of willingness to hold on to a rental or willingness to acquire more".

Revisiting the Bright-line test.

Another win for investors! While the Labor government extended the bright-line test to ten years, the National Party plans to reverse these changes. Bright-line determines regulations on taxing the financial gains made by buying and selling properties for income. National will scale back to a two-year period.

What Labor regulations will stay?

Regulations banning rental bidding and putting in place a timeframe of 12 months between rent increases are set to stay. Despite National’s initial opposition to Healthy Homes, these standards also appear to be safe.

As part of the agreement to govern alongside New Zealand First, National has reverted plans to implement a foreign buyers tax plan. 

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Gina Colcord

Business Manager

Gina Colcord is an experienced Business Manager in property management with over 15 years of experience. She has worked across various property types and has been recognised for her achievements, including being a finalist for the REINZ Business Development Manager Award in 2020 and previously winning the LJ Hooker National Award for Best Property Investment Management in NZ.

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