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Source: ONE News -
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Property investors have warned that rents could go up by $34 a week if the government scraps landlords' depreciation claims on housing, but the government says they are wrong.
The Property Investors Federation estimates that, on average, landlords could miss out on $1,750 a year by not claiming depreciation. This works out to be approximately $34 a week. It is believed most of that will be passed on to tenants.
The Monte Cecelia Housing Trust, which provides emergency housing for people in south Auckland, is worried about any increase in rent.
"Those costs are being passed on to low income families who cannot sustain those rents," says Monte Cecelia's Elaine Lolosio.
However, Labour thinks the increase could be even more.
Labour MP Trevor Mallard estimated that the increase could be as much as $45 across 400,000 households.
He says ditching depreciation claims, where landlords can claim back for renovations or home improvements, will mean renters will be struggling.
"It means that people who are poor will end up being very poor as a result of this. Because they'll be paying this and they (will) spend just about all of their income," he says.
But Prime Minister John Key says the figures were wrong and the government's advice was that if there were rent rises they would be small.
"Whether rents actually rise is something we will have to wait and see, but the advice we've had is they are unlikely to rise by very much at all, if at all," Key says.
The government is looking at lifting GST from 12.5% to 15% to cut taxes across the board.
The government has said they will make sure those on benefits are compensated and that no one will be worse off due to the GST rise.
It is planning to use the changes to property taxation to help fund that package and to help make such investments less attractive.
