'Obviously it will erode some equity': What Opportunity's tax plan would mean for housing
The party is proposing a 1.75 percent annual land tax, which drops to 0.5 percent on rural land.
The Opportunity Party's proposed land tax could lead to a reduction in house values of 10 percent or more, according to economists. The party's plan includes a 1.75 percent annual land tax and a 0.5 percent tax on rural land, funded by a weekly citizen's income of $370 for most adults, with additional support for pensioners and some parents.
Westpac chief economist Kelly Eckhold noted that a 1 percent land tax on house prices would decrease housing values by 9.5 percent, based on a previous study. He emphasized that the impact on house prices would vary depending on the specific property and its location, with higher-value properties potentially being more affected.
Cotality chief economist Kelvin Davidson concurred, estimating that land taxes could reduce housing values by 10 to 15 percent. The land tax would be deferred for retirees and farmers, who are more likely to own their homes without regular income. Opportunity Party leader Qiulae Wong estimated a 10 percent to 15 percent reduction in property values, primarily due to the high land component in Auckland's housing market.
Eckhold suggested that the citizen's income policy could potentially increase rents due to more disposable income from tenants.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
