Rents rising as landlords are forced to adjust for the increased costs of owning rental properties.

The recent tax changes that removed the ability to deduct interest on rental properties have had a significant impact on the housing market, particularly for working mum and dad investors with just one or two rentals. These changes have resulted in rents rising, as landlords are forced to adjust for the increased costs of owning rental properties.

One of the main reasons for the rise in rents is the tax change that removed the ability to deduct interest on rental properties. This is a standard accounting cost of business practice, but it has had a detrimental effect on working mum and dad investors with just one or two rentals. On the other hand, large property investors and professional commercial and residential housing stock owners can simply repurpose debt (borrow against commercial and pay off residential debt) or lease housing stock to government-backed social housing providers and still be able to deduct all interest.

This is a clear example of how the current government's policies are helping the rich and punishing the poorer middle to lower class. The average rent for residential properties in Auckland managed by the region's largest real estate agency, Barfoot & Thompson, increased by just over $20 a week last year. The agency manages more than 17,000 Auckland residential rental properties on behalf of landlords and their average rent in the fourth quarter of last year was $629.53, an increase of 3.29% ($20.04) compared to the same period of last year. The biggest increase in rents was for three-bedroom dwellings, for which the average rent was $637.15, up 3.68% for the year.

The recent tax changes have had a significant impact on the housing market and have resulted in rents rising for working mum and dad investors with just one or two rentals. This is a clear example of how the current government's policies are helping the rich and punishing the poorer middle to lower class.

It's time for the government to revisit these tax changes and find a solution that works for everyone.

https://bit.ly/3HDjZRh

#assuredproperty #housing #rentals #propertyinvestment

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