The NZ Property Investors Federation (NZPIF) welcomes the new guidelines released by the Privacy Commission. These guidelines are governed by the Privacy Act 2020 and must be followed by all private rental property providers, including property managers. The new guidelines outline how information must be collected, retained, and govern any disclosure of personal information in the rental accommodation sector. They will ensure that only information required for each stage of organising the renting of a property is obtained at that time.
The test is to ask the question, ‘do you need the information for a lawful purpose connected with finding tenants and managing tenancies?’ This should be asked at every stage of the process, including viewing where only the name and contact information should be gathered. When a prospective tenant is actually applying for the tenancy, more information can be collected, and then more can be obtained when preferred applicants are being checked. Additional information can be requested when preparing the tenancy agreement. Finally, while managing, the tenancy a landlord can update any information already collected. This five-step process, although great in theory, will slow down the time taken to fill an empty rental property, and leave more houses empty for longer in an already tight rental market. Although a landlord may only ask for specific information at different stages of the tenancy application process, a tenant may decide to provide additional information to put them ahead of other tenants applying for the same rental property.
Landlords are advised to provide a privacy statement on all information gathered, explaining how the information is to be used and handled. This is especially important for the tenancy application form and tenancy agreement. The new guidelines indicate that information on a tenant should be destroyed if is no longer required. This, however differs from the MBIE Compliance and Investigation team requirements which appear to override those of the Privacy Act.
Other points made in the new guidelines include the obtaining of consent from the tenant if information is sought from a secondary source such as a credit history company. Tenant blacklists are against the Privacy Act and are a breach of the act. Any breach to the Privacy Act may result in the offender having to remedy the breach or financial compensation.
The Privacy Commission is also launching a new compliance monitoring programme to ensure that private rental property providers, property managers, and agencies are acting in accordance with the Privacy Act. This, along with the work of the separate MBIE Compliance and Investigation Team will ensure the systems are followed.
Copied from the NZPIF webpage.
The Government has announced the design details of the mortgage interest tax deductibility, which affects property investors and ultimately tenants. “The NZ Property Investors’ Federation (NZPIF) is pleased that the details have been released. The definition of a “new build” property, is one that has received its code of compliance after 27 March 2020, and interest deductions will still be possible for the next 20 years irrespective of the ownership. This is a step in the right direction.” says Sharon Cullwick, NZPIF executive officer. “However, NZPIF does not see how this will help tenants of older properties, who will ultimately have to pay for the extra costs put on landlords. It also will not help tenants who are saving for their first home.”
In March this year, the Government brought in radical changes for property investors, treating them differently from any other business by removing the ability to deduct mortgage interest as a legitimate business expense. MBIE, IRD, accountants and tax experts do not support these changes.
Finance Minister Grant Robertson said, “The Government’s goal is to encourage more sustainable house prices, by dampening investor demand for existing housing stock to improve affordability for first-home buyers.” It is interesting to note that since this announcement, house prices have not significantly changed.
Today’s details identified a ‘new build’ more precisely and an additional supplementary order paper was released that proposes a five-year new build bright-line test for these compared to ten years for older properties. This allows a newly built property to be sold after 5 years without any bright-line tax implications.
A number of exemptions from application of the new law have been announced. Properties purpose-built for rental homes and owner-occupier properties are exempt. Kainga Ora and many community housing providers will also generally be exempt from these rules.
However, NZPIF is concerned that residential investment properties capable of being used for long-term accommodation, such as Air BNB properties, would be subject to the proposed rules. In addition, if significant work is undertaken on an existing property that does not require a new code of compliance, it will not qualify to be exempt.
Cullwick says it is expected that some rental home providers will have to increase rents to cover this additional tax, or they may end up selling properties, thus reducing the availability of rental homes.
Copied from NZPIF webpage.