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Welcoming landlord and tenant privacy guidance
Landlord and tenant privacy guidance welcomed Confusion part of cooling property market equation
The Auckland Property Investors’ Association Incorporated (APIA) has welcomed last November’s release by the Office of the Privacy Commissioner (OPC) of its Privacy Act guidance for landlords and tenants.
The guidance sets out the information landlords can and can’t ask tenants in most cases while leaving ample scope for further inquiries to be made in appropriate circumstances. “Housing is an emotional issue for many Kiwis,” says APIA president Kristin Sutherland. “This guidance offers the sector some muchneeded certainty and goes a long way to help build trust between landlords and tenants.” The Association is particularly encouraged by its flexible and principle-based approach. “This is a far cry from the usual heavyhandedness landlords have come to expect from government agencies,” Kristin says. “To me, this is an acknowledgement that renting is not a cookie-cutter process. As long as landlords operate within the 13 principles under the Privacy Act, they should be able to dialup and dial-down their inquiries in a way that supports the objectives of their rental business.” She considers the monitoring framework released alongside the guidance as the commissioner putting the sector on notice. “Compliance is not the most thrilling aspect of landlording. But oversight is necessary if we want people to have confidence in the system. “We cannot pretend that there are no problematic behaviours that subject tenants to the indignity of information overshare. “While I don’t believe those practices to be common, they certainly cast the entire sector in a bad light. “Like many tenants, our members are frustrated by those landlords who do not treat their rentals as businesses and tenants as customers. “At the very least, this framework clearly sets out what we can expect from the OPC in terms of how it will exercise its powers.” The association intends to make inquiries into the mechanisms of the anonymous tip line for tenants. “We want to make sure that this is a system of integrity with appropriate controls in place so that it is only dealing with genuine privacy complaints rather than adding superfluous compliance burden on landlords.
“I don’t expect it to be a witch-hunt against landlords, but I want to be able to tell our members that honestly. “Throughout the entire review process, OPC staff members engaged us with a great deal of openness and curiosity. “We understand that theirs is an unenviable task of balancing the competing interests between landlords and tenants. Despite that, they had always responded to our feedback with thoughtful deliberation and made us feel heard. “Our goal is to build on that relationship so that we can be part of the positive movement to make renting fairer for everyone.” CT A survey of chartered accountants and tax agents has revealed that incoming legislation intended to help cool New Zealand’s over-heated housing market is already having a major effect on investors – but largely because of confusion and lack of detail rather than clear policy.
The annual survey, jointly run by Chartered Accountants Australia and New Zealand (CA ANZ) and Tax Management New Zealand (TMNZ), sought the views of 361 accountants in public practice, on recent tax policy developments. Among the findings, the survey revealed that 70 percent of respondents have already seen clients change or voice their intention to change their residential property investment behaviour due to ongoing changes to the extended bright-line test, and proposed changes to deny interest deductions. CA ANZ New Zealand tax leader, John Cuthbertson, says further results from the survey show two key factors in play; the complexity of the proposed rules, and uncertainty as the details could change before the legislation is enacted in March 2022, despite the bright-line and denial of interest deductions coming into play from earlier last year. “The survey suggests that the housing market has been given a policy placebo, in the form of legislation that is influencing behaviour before it is fully developed and enacted. “Residential property purchasers and investors typically react to the specific detail of legislation. “However, in this case the market appears to be reacting to the complexity of the proposed legislations carveouts and inconsistencies, and the fact that it won’t know exactly what is in place until March 2022, despite it being backdated to capture activity in 2021. “To be fair, the Government’s aim was to cool down the overheated housing market, which is causing a range of economic and social issues, but we’re not sure this is the best way to do it.” The survey shows that over 21 percent of the respondents, or one in five, feel ‘not at all confident’ about advising clients on the proposed new build interest limitation rules, and over 65 percent of participants felt the phase out and denial of interest deductions would be somewhat or extremely difficult to comply with. Similarly, almost 50 percent of respondents said they were either somewhat confident, or not at all confident on advising on the new build bright-line test. “Because this policy hasn’t been developed in line with the generic tax policy process (GTPP), there’s a much higher chance of unintended consequences and collateral damage. “The survey shows a considerable lack of confidence in how the legislation will work, and that will likely result in non-compliance and issues around who is captured and who isn’t. “It’s important to note that the level of complexity encountered will depend on the number of properties owned, banking arrangements in place and the mix of interest limitation rules and concessions in play,” he added. TMNZ chief executive, Chris Cunniffe, says the survey provides a good indication of how the proposed rules would be rolled out. “In their current complex form, there’s likely to be a lot of variability in compliance with these laws. Especially as not everyone has a tax agent or accountant helping them. “While the extension of the bright line test to 10 years might land well for most mum and dad property owners, the denial of interest deductions and how that relates to new builds is likely to be misunderstood. “There’s opportunity for government to provide greater clarity on the law changes and simplify certain aspects to help owners and accountants alike.” CT
Kiwis are keen to get back to business after embracing the summer break, but is our enthusiasm enough to keep the market busy amid rising inflation and affordability constraints?
After bracing for impact following the onset of the global pandemic, New Zealand’s housing market has been set alight, but with historically low interest rates on their way back up – is 2022 the year the fire gets put out?
Encouraged by the effects of a comprehensive fiscal programme tasked with protecting the economy during a global health crisis, Kiwi homeowners are an estimated $600 million better off thanks to ultra-low interest rates, quantitative easing and a sustained effort to keep our economy afloat. Despite these moves, and housing value growth of circa 30 percent in the year to December, Kiwi sellers sat on the sidelines for the better part of 2021, scared to list their properties for sale and risk not finding their next dream home. Constrained by a shortage of listings and a national lack of supply, Bayleys salespeople are pleased to report a shift in sentiment as we closed out last year with national auction bookings up 64 percent - signalling the return of the confident seller. Emboldened by recent survey results that suggest 71 percent of Kiwi homeowners expect property values to continue achieving sustainable upward growth, we’re seeing sellers return to the market, keen to utilise the seasonal advantage of summer to make their long-awaited move. A fresh round of new listings is nothing but good news for everyone across the marketplace, with more choice offering options for buyers previously holding out against a backdrop of tightening credit conditions. It’s true, interest rates are rising, and the cost of goods and services have moved upward too. However, the very nature of inflation encourages tangible investment into bricks and mortar assets. Across the country, new council valuations are expected to keep the residential property market at the forefront of the conversation. More Kiwis will take stock of recent value gains to reassess lifestyles knowing agile workplaces and a renewed focus on health, happiness and the home is here to stay. Regional markets are poised for a spike in demand as our borders reopen to vaccinated travellers – some, enticed by Lonely Planet’s recent naming of Auckland as the ‘best city to travel to in 2022’. We expect this buoyancy will be further aided by returning Kiwis keen to once again call Aotearoa their home. While current market conditions support a continuation of the good times ahead, rain clouds do loom on the horizon. We’re seeing tougher bank testing, policy intervention and the implementation of debt-to-income measures (DTIs) as having the most potential to influence residential activity beyond quarter one.
BAYLEYS PAIRING TOGETHER FOR A BETTER TOMORROW
We’re on a mission for the Christchurch City Mission
Celebrated Chef Richard Hingston has crafted a sensational Pear and Brown Sugar Tart recipe as the centrepiece of our fundraising campaign. While your tart is baking in the oven, try your hand at the 1,000 piece jigsaw puzzle inspired by Richard’s recipe. You might even like a pear tea towel – a great gift for the foodie in your life and the perfect addition to any kitchen. When you purchase from our Bayleys on a Mission range you’ll help the City Mission deliver programmes and services to those in need. We simply can’t do it without you, and we hope Richard’s signature recipe helps sweeten the deal.
