Governments own policy has contributed to Affordability crisis

Tax rate increase hard on aspiring homeowners – 13 Mar 2008 – Politics: New Zealand Political News, Analysis and Comment including 2008 election coverage – NZ Herald

Bwahahahahah….The government has been fingered as the culprit behind the boost in the housing market. The intended target of their envy tax used the tax advantages that Labour created and squeezed out potential homeowners from the market.

Lifting the top tax rate to 39c may have boosted investment housing, to the disadvantage of potential homeowners, a report from the Department of the Prime Minister and Cabinet says.

And it says the value of a median-priced house increases by $25,000 for an investor able to deduct losses from rental properties compared to a potential homeowner who needs a large mortgage to buy the same house.

The report is by the House Prices Unit, set up within the Department of the Prime Minister and Cabinet to work on housing affordability polices.

Now this is awkward! Another of those unintended consequences of law making by opinion poll. Suck it up Clark, suck it up.