While some property investors are considering whether it’s worthwhile staying in the business, with certain tax breaks about to disappear, and the banks having moved, at the government’s direction to make borrowing money more difficult, it’s worth noting that those restrictions have recently been relieved a little.
Since January 1 2019, potential landlords with limited funds may find themselves ‘passing go’, and being able to buy again, as banks are now allowed lend to more investors whose deposits are below 30% percent.
Of course the Healthy Homes Guarantees Act has brought new rules around heating and insulation, which must be taken into account as they impact on landlords; notably that investors who haven’t installed mandatory levels of ceiling and underfloor insulation will face a stiff fine if that isn’t in place by July 1 2019.
As well as this there are strong suggestions that a capital gains tax may be introduced. Past comments from the government has suggested that any CGT (captial gains tax) will not be retrospective.If that happens, it will be a long way off, but nevertheless, many would-be first-time landlords, or investors planning to buy again, are putting their plans on hold in order to see what transpires.
All of this aside, outside of the major cities – or in fact, pretty well anywhere away from Auckland (and Queenstown) it’s still perfectly possible to buy quality properties and achieve a decent yield. Many regions still lack good, clean rental accommodation for young people who haven’t managed to get on the housing ladder as buyers yet, and in some areas there is continued, often urgent need for housing seasonal workers.
One of those places is Marlborough, where the viticulture industry is going from strength to strength and other seasonal industries such as fishing and various types of horticulture require large numbers of workers, especially at certain times.