44612 (2024). Hon Barbara Edmonds to the Minister of Finance

44612 (2024). Hon Barbara Edmonds to the Minister of Finance: What evidence, if any, does she have to support her statement “What that Government had budgeted for was to grossly increase costs on landlords, which, I believe, would have been passed on to tenants in the rents that were charged.”?

Hon Nicola Willis: It is self-evident that denying interest deductibility for landlords, as was budgeted for by the previous Government, would have increased the tax owed by landlords. This would have, in turn, increased the costs landlords faced with providing property for rent. In its regulatory impact statement on reintroducing interest deductibility on residential investment property, Inland Revenue stated that: "the denial of interest deductions is likely to make investment in rental housing an unattractive proposition for many investors. Over time, this is likely to reduce the supply of housing and rental housing (relative to what would be the case if interest expense was deductible). This would place upward pressure on rents, which would increase housing costs for tenants".