Property investors are between a rock and a hard place in the coming election with the Labour Party, Greens, and Hone Harawira calling for a range of measures against rental property and the National Party silent about further moves after a number of dramatic changes imposed without warning. Those who expected change under a National-led government did not expect more tax and more compliance issues that came with the Residential Tenancies Amendment Act 2010, since the National Party went into the 2008 election promising to retain existing tax rules and deduction provisions for rental property owners, and since the party perceived no need to cool down the housing market.
Responding to recommendations from the anti-property Tax Working Group, the 2010 Budget:
1. Ended landlords' and businesses' ability to claim depreciation on buildings with an estimated useful life of 50 years or more.
2. Tightened the definition of income for Working for Families eligibility to exclude investment and rental losses.
3. Changed the rules on loss attributing qualifying companies so that tax losses of those companies could be attributed to shareholders. (1)
