The Property Council is warning build-to-rent construction could dry up if the government doesn't rethink its new investor tax policies.
The sector is seen as one of the solutions to the housing crisis, but it's feared any changes could put developers off.
One Auckland site will soon house 250 apartments as part of a build to rent scheme, providing long term tenancies.
The developer says there's more in the pipeline.
“Our rollout would see about four to five of these buildings in the fringe CBD area of Auckland,” David McConnell from the McConnell Group said.
But the sector is under threat by government plans to scrap interest deductibility on residential investments, closing off an avenue for investors to decrease their tax bill.
There are fears it could turn them off completely.
“Really this will be a death curse to build to rent,” McConnell said.
In a letter to the Government today, the property council is stressing the proposed changes will be a massive barrier
with petitions presented at parliament this week signed by thousands rejecting the changes.
“Ultimate handbrake, it's just not going to make build to rent viable in big numbers,” Property Council advocacy head Denise Lee said.
They're calling on the government to exempt build to rent properties from any new tax policies.
“If you've got developers who are saying hey here's thousands, hundreds and thousands of units that we can bring online pretty quick - why wouldn't you do that?” Lee said.
Paul says recognition from the Government is key.
“I think it's crucial that the government recognise that this is an asset sector in its own right and treats it appropriately and has policy settings that are really going to attract the large scale capital that we need,” he said.
Housing Minister Megan Woods says the Government is committed to encouraging new housing supply, adding consultation on proposed changes close on Monday.
Officials will then iron out details such as the length of time a property is considered a new build and therefore exempt.
“I think we also have to recognise how many people rent and how important the rental sector is in New Zealand,” Paul said.
Final changes will be introduced into Parliament in October.
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