Property tax 'will lead to housing shortage'

Nelson is headed towards an "extreme housing shortage," according to Nelson Property Investors Association secretary Glenn Morris, who is critical of proposed tax reforms for property owners.

"I'm getting more and more angry at the repeated comments of the Government, the Reserve Bank and politicians suggesting it's a bad thing to invest in housing," he said.

The Government is expected to include in this year's Budget its response to the Tax Working Group's recommendations for revamping the tax system, including taxing capital gains on residential rental properties, a low-rate land tax and tightening depreciation rules.

Prime Minister John Key was expected to signpost some of the changes in a speech in Parliament this afternoon.

Mr Morris wasn't aware of any investors trying to sell off properties ahead of any announced changes, nor does he think the changes are likely cause house prices to drop.

"Every time the Government messes with the housing market it does one thing – makes innocent parties suffer and bigger landlords profit," Mr Morris said. "This Government, and the previous government have done absolutely nothing to assist first-home buyers, unlike in Australia."

Mr Morris said there had already been a drop in new houses being built and few vacancies in rental properties around Nelson. "I can see with a tightening of the market we're going to have a housing shortage.

"It's scary – the last time we saw it like this, good people were suffering because they couldn't find a house to live in."

Haven Realty property management divisional manager Kaylene Tasker said landlords didn't appear to be panicking about changes to the tax system and she hadn't noticed any new trends emerging in the rental market.

"Rents are sitting stable. Lower price properties are moving a lot quicker than the $400-plus ones," she said.

- © Fairfax NZ News