Multimillionaire landlords are the real squeezed middle according to National

Written By: mickysavage - Date published: - 24 comments
Categories: class war, Economy, national, same old national, tax

Craig Rennie of the CTU has continued his excellent work analysing National’s proposed tax cuts and has come up with a doozie.  Landlords who own multiple properties will get huge tax cuts if National’s policy is put in place.

According to Rennie’s analysis:

2021 MBIE data shows 346 Landlords owned at least 200 properties each. If they have as much mortgage debt on average as the average landlord (it is in fact, probably higher), they would get an average tax cut of $1.3m each over 5 years. These 346 would get $464m over 5 years.

These landlords will not reduce rents.  They will pocket this money and no doubt a few of them would buy more rental properties adding to house inflation.

And guess who will be paying for it?  Yep the poor.

Again from Rennie:

At the same time National would help pay for this change by changing the indexation of main benefits to CPI rather than wages. This would save $2bn – almost identical to the cost of the landlord tax giveaway. This would cost thousands for each beneficiary across the same period.

National’s tax plan would enrich those with significant assets – while harming those with the least. National should scrap their unfair & unreliable tax plan which is balanced on the back of the most vulnerable. They shouldn’t pay the price for National’s thoughtlessness.

I previously acknowledged that I own a rental property and theoretically could benefit from any change.  I went onto National’s website to try its tax calculator and I was surprised that it did not ask any questions about if I owned a rental property.  Presumably they did not want this aspect of their policy to be publicised.

But yeah let’s cut the amount that the poor and disabled will receive so that mega landlords can get huge tax cuts.

How very National.

24 comments on “Multimillionaire landlords are the real squeezed middle according to National”

Comment numbers have changed to permanent references. Older quoted numbers may no longer identify the same comment.

  1. 1

    Henrietta Bollinger writes and fights for the disabled community, especially those on a benefit.

    "They deserve the dignity and respect of getting their needs met," Bollinger said.

    But they're worried about what's going to happen under National as the party is proposing to tie benefits to inflation, rather than wage increases.

    https://www.newshub.co.nz/home/politics/2023/10/election-2023-hundreds-of-landlords-to-become-tax-cut-millionaires-under-national-s-plan-analysis.html

    The Disabled, the Low Income incl Beneficiaries, Renters, (of whom most would be in the negatively affected part). All are going to be hit by a NAct govt. As in… combinations of slash leading to a king hit punch down. Actually more of a cowards punch.

    For the (ironic) benefit of the 1 %.

    Million dollar tax breaks for them? ! fark…

    1. 1.1

      It doesn't feel good, no.

      Seeing our potential gains or our status quo being yanked away from us by any NACT government will set back disability rights by a bit.

      It does hurt and makes me feel fear even if by some miracle we get a Labour-led Government, because my goodness, even if we got that to happen, my god, we would have been so perilously close to getting a Toryish & Trumpish government.

      And I won't forget that feeling of fear for a long time.

      Vote for Greens or Labour or Te Pati Māori please to keep us on the right track though it may not be perfect!

      1. 1.1.1

        Yep, as PLA says, it's a coward's punch to those who are already disadvantaged and, as you note RoG, it doesn't feel good because it's not good; it's a rotten and cruel attack on the most at-risk in society.

        Not very Christian of Luxon, is it? "And the King will answer them, ‘Truly, I say to you, as you did it to one of the least of these my brothers, you did it to me.'" – Matthew 25:40

  2. 2

    Yeah the "squeezed middle class" is just another fictitious group devised by National. They don't exist any more than their imagined "war on farmers" or any other war they dream up.

    If the "squeezed middle class" does really exist they are likely to be either landlords or the rural townie Ford Ranger brigade angry at having to pay a few more thousand dollars for each year's model update. They are the type that lunch out at expensive restaurants with their 80.000 dollar utes parked outside and complain about how cruel life has been.

    Not so middle, and definitely not so squeezed.

    1. 2.1

      There is a "squeezed middle" as well as a "crushed bottom". There is also an "annoyed at having the expected wealth accumulation trajectory pegged back slightly".

      The Nats will give the most assistance to the last of these three categories, while heavily propagandising the "squeezed middle".

      2. 2.1.2

        Running through the "squeezed middle," there is a thread of perverse, mutinous contrarianism and irrational resentment of the Government for saving 20,000 lives during a one-in-a hundred year pandemic. https://www.rnz.co.nz/news/national/499516/new-zealand-s-covid-19-response-saved-20-000-lives-research

        This willful backasswardness, along with a self-perpetuating, tiresome narrative about people being "grumpy," seems to motivate some of the "squeezed middle" to vote against their own interests by voting National.

        Not only are they voting against their own interests, but by voting Right they are trampling all over the interests of the most at-risk, disadvantaged people in our country.

        We now know that National's tax plan is a scam. Sadly, in some quarters, National's deliberate fudging, obfuscation, and outright lying is seen as something to be admired. For example, Newshub's Jenna Lynch commented, "National has taken what is in reality a $25-a-week tax cut for most middle earners, doubled it into a couple, doubled it into a fortnight and slapped in their childcare subsidy – and then all of a sudden they have a $250 figure to slap all over their billboards…[she called it] a masterclass in political marketing.” https://thedailyblog.co.nz/2023/10/10/mediawatch-how-the-nz-media-helped-national-trick-you-over-their-tax-lie/

        And the craziest part of all is that the "squeezed middle" voting in this sadomasochistic way will advantage only the mega rich (such as mega landlords), not the "squeezed middle." As Chris Trotter noted, "That so many of us are willing to see so much pain inflicted upon our fellow citizens, strongly suggests that there is a fair amount of sadism mixed in with all that masochism. Hardly a pretty picture of our national character" https://democracyproject.nz/2023/10/09/chris-trotter-reckless-speculation/?utm_source=rss&utm_medium=rss&utm_campaign=chris-trotter-reckless-speculation

  3. 3

    Get Our Country Unearned LandLORD Income Back on Track

    How very National in deed – self-serving scammers absolutely in thrall to Mammon.

    Luxon's "new favourite dinosaur"? "The TaxReliefosaurus" – except it's not new, is it Chris.

    Election 2023: Hundreds of landlords to become tax-cut millionaires under National's plan – analysis [10 Oct 2023]
    Willis said beneficiaries will get cost of living help when their rents are lower.

    But Willis admitted that the tax cuts wouldn't lower rents, just ease the increase.

    "It will slow the increase, it will put downward pressure," she said.

    Luxon unsure if he'll lower rents on homes he owns despite policy promise [10 Sept 2023]
    Christopher Luxon is unsure whether he will lower the rents on his own investment properties if National's housing policy is enacted despite saying the plans would put a "downward pressure on rents" if the party is elected.

    IRD report reveals ‘fundamental unfairness’ of how the wealthy are taxed [27 April 2023]
    A wealth gap reality check
    … the median effective tax rate paid by New Zealand’s richest individuals is just 8.9%, compared to an effective tax rate of 22% for someone earning $80,000 a year with no other income. As The Spinoff’s Duncan Greive explains, “the low tax rates paid are achieved because this group earns just 7% of its income through wages …”

    Party Vote Green – https://www.greens.org.nz/ending_poverty_together

    1. 3.1

      Coupled with National's declared changes to many of Labour's rent reforms, the new year looks to be a bad one for renters. The rental housing shortage seems set to continue whoever wins.

      There will be nothing to ensure that landlords pass on the newly reinstated rebate, and I suspect most won't because National will tell them that they owed the backpay. Plus gone will be the security that the landlord can't increase the rent anytime they choose, by as much as they choose, and evict tenants at whim.

      I wonder how this will reduce the cost of living that National promised to do?

  4. 4

    This morning on RNZ, Sue Harrison of the Property Investors Federation is confirms Luxon's 'downward pressure on rents' is another lie

    https://www.rnz.co.nz/national/programmes/morningreport/audio/2018910602/questions-as-to-whether-tax-cuts-will-be-passed-on-to-renters

    Renters United speaks more sense:

    The Property Investors Federation says rental property owners are facing financial difficulties and need a tax break.

    However, Renters United spokesperson Geordie Rogers disagreed, saying more money for landlords was unlikely to provide tenants with lower rents. He told Morning Report analysis by Treasury on how rents were set showed it was not based on the costs of providing a rental home but on how many properties were available.

    "A great example of that is when interest rates were really low, we didn't see those savings being passed on to renters, so it's equally likely that when we give these hundreds of millions of dollars worth of tax cuts back to landlords, renters will not see the benefit of that."

    Policies such as National's were aimed at investors buying existing properties. It would have been better if the party had directed the tax incentive at encouraging potential landlords to build new homes, Rogers said.

    "Continuing to invest in a housing crisis and not passing those savings on to renters or the one-third of New Zealanders who actually rent really is an obscene policy that is only going to make it more difficult to have a productive economy in New Zealand."

    Rogers said while the tax cuts might mean there would be less pressure on raising rents, landlords would still be looking to extract the maximum amount of cash because the supply was constrained.

    https://www.rnz.co.nz/news/political/499877/election-2023-national-s-tax-relief-for-landlords-an-obscene-policy-tenants-advocate

    1. 4.1

      "The Property Investors Federation says rental property owners are facing financial difficulties and need a tax break." LOL, that is absolutely laughable smiley

        1. 4.1.2.1

          There was Bishop’s lie about a renter’s advocacy group helping with their policy.

          But it is rather like Crusher- pay back double and if that fails cry and accuse the opposition of bullying.

          It only has to confuse or check a few swing voters to be successful.

          All this we did know before- the question for the lickspittle journalists is why the public didn’t know it or understand that it’s simply taking money from beneficiaries and the poor and funneling it to landlords again.

  5. 5

    I nearly crashed my Leaf when I heard the Property Investors lady on RNZ this morning moaning about how hard done by investors were. I too am a landlord and an accountant. And do not have any mortgages on our investment property or home. It simply does not make economic sense to have a mortgage with interest to pay, on a rental property. Unless it is for the obvious – to leapfrog into more and more properties and deprive others like 1st timers.

    As you imagine I have a few clients with properties and they sure do test my patience.

    1. 5.1

      Sure, once upon a time there were those who had workplace super and those who had a bach and those who owned a rental (three ways of preparing for retirement). Others just owned their own homes or we had a state house for them.

      But since 1984 and floating of the dollar there has come the inflow of funds for borrowers to speculate with and they claimed mortgage deduction against rent income and leveraged more property via CG (at first inflation and since 2000 in real terms).

      This created the most powerful vested interest class in our economic and political history, and people like Douglas, Prebble and Bassett say nought about it. Nor Richardson who got rid of the estate tax and brought in market rents for state houses, nor Key (who got rid of gift duty) and nor Luxon. Shame on them all.

  6. 6

    All of this ties in to one of my favourite hobby horses and a related issue

    The invisible insidious nature of lobbyists and their ilk. Undermining democracy and reinforcing that politicians don't serve the public but their donors. (Not looking directly at you, Stuart Nash).

    Which brings in election campaign funding. This post demonstrates the need for state funded political campaigns. If you believe the assertion that the 'property industry' was the largest donor of funds to the political parties.

    1. 6.1

      I believe the assertion!

      "Since 2021, people aligned with the property industry have donated more than $2.5 million to political parties.

      More than half of the cash from the property industry went to the National Party (53 percent), followed by ACT (32 percent) and New Zealand First (12 percent). Labour received 2 percent."

      https://www.rnz.co.nz/news/national/499176/property-industry-tops-political-donations

      And this, from RNZ in September.

      https://www.rnz.co.nz/news/election-2023/497947/no-significant-donations-to-the-labour-party-from-businesses-in-over-two-years

        2. 6.1.1.2

          The supreme irony is to lobby your MP for change!

          To do that you will talk to one of their staff who, hopefully, aren't dizzy from the revolving door between political staff and the 'communication industry'.

          BTW, thanks for the links, I was in my lunch break and pressed for time

  7. 7

    Mr No Right Turn does not mince words on tax cuts for landlords. The miserable Nats are lying about how fair is the package.

    National's tax plan is to cut benefits to give money to landlords. That's bad enough, but it gets worse when you look at how many people are affected. On the one hand, we have 170,000-odd people on jobseeker benefits, who will face reduced living standards. And on the other, we have 300 mega-landlords, who will get a million dollars each:

    http://norightturn.blogspot.com/2023/10/more-class-warfare.html

  9. 9

    Someone or a series of someones needs to tail Luxon and give him a stick to beat the poor with wherever he goes.

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