Earlier this month the report of the Social Services Select Committee on the Residential Tenancies (Damage Insurance) Amendment Bill was finally presented to Parliament.
Parliament accepted the Committee’s recommendation that the Bill not be proceeded with.
This means that the Maryan Street sponsored Bill and its proposal that landlords protect tenants against personal liability for damage they were not responsible for has been totally rejected however, parts of her Bill have now been picked up through a Department of Building and Housing review of the Residential Tenancies Act – see following.
LEGISLATIVE UPDATES
Two on-going and important areas are awaiting further Government action. They include the:
Residential Tenancies Act 1986 I
n September 2006 the Government proposed amendments to the Act including:
• introducing new sanctions for landlords and tenants who breach their obligations
• allowing landlords to recover reasonable debt collection costs incurred in enforcing Tenancy Tribunal orders
• allowing the Tenancy Tribunal to make orders against guarantors
• new grounds for ending fixed-term tenancies and clearer processes for renewing them
• new rights of entry for appraisals by real estate agents and building inspectors
• requiring landlords to appoint a New Zealand based agent if they are outside New Zealand for more than three weeks
• clarifying responsibility for outgoings, such as water charges.
The latest proposed changes to the Residential Tenancies Act, announced 29 November, include:
• limiting the liability of tenants for damage that they did not cause and could not reasonably have prevented [a tenant’s liability will be limited to 4 times the weekly rent]
• extending the coverage of the Act and access to tenancy dispute resolution services to sectors of the community not currently protected
The Government has indicated that drafting instructions for the amending legislation will be made early in 2007 with a view to having it before Parliament in the middle of the same year.
Unit Titles Act 1972
Building Issues Minister Clayton Cosgrove also announced, 29 November, the key principles of the proposed new legislation that will include:
• Clarity around the rights and obligations of unit owners and bodies corporate
• Encouraging sound property management practices that will protect long-term value and investments
• Making joint decision making by the body corporate easier
• Effective ways to sort out problems and move forward
• Making information more readily available to purchasers and unit owners so they can make informed choices
• Making survey and title processes more streamlined for surveyors and developers
• Allowing large, staged or complex developments to be set up and managed more easily
The Minister has indicated that a bill to amend the Unit Titles Act will be introduced to Parliament from mid-2007.
TAXATION
The subject of taxation regularly crops up and politically the Green Party trickily raised it during the month (14 November) through a series of Parliamentary questions to the Minister of Finance.
Sue Bradford MP asked the Minister whether he was considering any means of restraining the ongoing influx of foreign investment into the housing market, given its upward pressure on house prices.
The Minister replied, “generally, in the area of sub-divisions”.
Bradford followed with a line of questioning that parroted the Reserve Bank, financial intermediaries and advisors’ position against residential property investment, asking: “Does the Minister agree that there is a crucial difference between investment that grows wealth for this country and simple asset sales that produce wealth for the purchaser, with no increase in employment, technological innovation, or public good; and does the Minister plan to take any measures at all to make sure we get more of the former, productive kind of investment and less of the latter?”
The Hon Dr Michael Cullen replied, “In general I think it is true, and one of the issues under consideration around taxation changes is exactly how the tax system may lead to various changes in one direction or another”.
Of interest to the Federation is that taxation matters especially a Capital Gains Tax, changes to depreciation allowances, ownership structures, tax deductibility, mortgage interest levies, limits on loan-to-value ratios and the like remain convenient areas that could be targeted by the Government as a knee-jerk reaction and response to the constant sniping by political opponents of property investors.
The Green Party and their policies are particularly investor-unfriendly (eg pro-GCT and anti- overseas investment) and because of their influence and support of the coalition government remains a significant risk to Federation member’s interests.
Elsewhere the Government has introduced the “Income Tax Bill” into Parliament (16 November) – a total rewrite of tax legislation of over 2,700 pages. All taxpayers and their advisors will be affected by the new Act and of interest to property investors will be clauses including: Subpart CB—Income from business or trade-like activities, Subpart EE—Depreciation, Subpart HA—Attributing companies and loss-attributing companies.
Need help or
support?
