Capital gains bonus for KiwiBuild buyers

Scoring a Kiwibuild house was already regarded as like winning a lottery, but the prize could be better still with another change by the Government.

Newshub: Housing Minister’s backdown on penalties for KiwiBuild property flippers

Newshub can reveal KiwiBuild has just become a much better investment.

The Housing Minister has quietly softened up the penalties applied to buyers who flip their home.

Documents obtained by Newshub show owners will no longer have to give up all capital gain they make on the house if they sell it within three years.

When Labour announced the policy in 2016, its plan to stop buyers reaping windfall gains was they must not on-sell their home for five years – or else they had to hand all the money they made to the Government.

That’s now changed to if buyers sell within three years, they must give up 30 percent of their profit.

“We really tried to strike the right balance here,” Mr Twyford says.

“We don’t want people cashing in on a potential windfall gain – but on the other hand, these houses are not subsided. People are paying for them with their own hard-earned cash.”

Is this a sign that it was harder to attract buyers to KiwiBuild ballots?

ODT editorial: Cracks appear in KiwiBuild

Kiwibuild, one of Labour’s primary policies, is showing signs of serious cracks.

The key for KiwiBuild and Labour will be winning the public relations battle, on which KiwiBuild narratives gain traction in the coming years.

Labour will suffer if the dominant view is that it is a lottery for yo pros (young professionals) who might be able to buy houses even in expensive places such as Auckland and Queenstown Lakes anyway.

Labour will be on the back foot if KiwiBuild is seen as a windfall for the likes of the graduate doctor and her online marketing manager partner who were the poster couple for the first such houses in Auckland.

And if KiwiBuild is seen as simply rebranding houses that would be built anyway, even apparently good progress towards the 100,000 target over 10 years will be seen as just spin.

It will be detrimental, too, if the view KiwiBuild is a useful hand-up for developers through guaranteed sales becomes the norm.

One wonders, too, if a scheme could have been devised so that potential lottery-like capital gains were ameliorated. Could KiwiBuild have been thought through better so that those buying at a discount would also have to sell at a reduction, the difference going to the next first-home buyer. Or the initial discount on market price would be returned to the government when the houses were sold. Although this has been achieved overseas, policies such as KiwiBuild can become mired in complexity.

Labour must be hoping the issues with the shaky start to KiwiBuild can be patched over, that it really can deliver lots of new homes and ease the housing crisis.

Crucially, it must hope its narratives gain purchase and the public can be convinced the scheme is positive with wide public benefits.

KiwiBuild was a ten year plan, but if it looks like a shambles in eighteen months time it may make the  2020 election campaign challenging for Labour.

 

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17 Comments

  1. Reply
  2. Blazer

     /  November 8, 2018

    anything is better than what National did.

    A second term would be time to get serious on property capital gains.

    Reply
  3. Gerrit

     /  November 8, 2018

    Ardern really needs to start sorting out her ministers. All of them look weak and seem to act without input from the PM or caucus.

    If she does not sort out her weak ministers it reflects badly on her leadership qualities.

    Reply
    • Treuddyn Ted

       /  November 8, 2018

      The Coalition Government need to have Ardern replaced or sent on a ‘How to be a Successful Leader” course.
      She’s the weakest link. She has no leadership qualities. If the leader is weak, then the team is weak.
      In her brain, Karel Sroubek had residency before the Lees-Galloway deportation decision fiasco.

      Reply
  4. NOEL

     /  November 8, 2018

    Geez how many owners are going to get cancer.
    “There may be occasions where KiwiBuild home owners encounter unforeseen changes in their circumstances, such as the death of a partner, divorce or serious illness, which means they need to sell their home. In these cases you will need to apply to the KiwiBuild Unit, which will consider each request on a case by case basis.”

    Reply
    • Kitty Catkin

       /  November 8, 2018

      I wonder how many of the 4 bedrooms that couple are going to rent out to help pay the mortgage. No wonder that they said it was like winning Lotto.

      Reply
  5. PDB

     /  November 8, 2018

    The gift that keeps on giving…

    Reply
    • Blazer

       /  November 8, 2018

      Amy should know ..has more properties than any other M.p…

      Key did alright ,flipped Parnell his single biggest lifetime deal..and then flipped Omaha…to ANZ C.E.O..Hisco..all done in the best ..possible..taste.

      Reply

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