• Tax warning for property flippers. (source) The Brightline test requires investors to hold properties for two years to avoid tax on any gains on sale. However, don't forget if it smells like a fish and looks like a fish, then the IRD will call it a fish. Essentially if they think you bought with the intention to sell and make a gain, then they could well call you guilty. And in the tax world you are guilty until proven innocent. So, if you buy a residential investment property with the intention to hold it long term, then document that when you sell it. Tell your banker, lawyer, accountant, advisors and make sure they make a diary note. Because the IRD has powers to reach in and get this info. Make sure your residential property investments don’t smell like fish. And get good tax advice! 
• ANZ reverses house price expectations, now expects annual decline for 2024 (source) Bah humbug. You are probably a long-term investor. So even though I don’t agree with this comment, even if it is true – before you know it interest rates will be back under 6% and demand will be lifting. See our newsletter from this week…supply is less than demand…prices must rise when demand is released.
• Rent yield gap of 4% 'largest in 15 years': Why would you borrow to become a landlord? (source) Yes – that is part of the reason people aren’t buying. But I’d argue it’s more because people have either struggled to get funding or they have been waiting for the bottom of the cycle. 
• Chris Bishop announces six changes to boost growth of housing (source) Just a reminder that last week we brought this to your attention and said we would cover it off in this week’s newsletter – which we did …see here 
• Panel scuttles Queenstown's affordable housing 5% levy (source)
  There is no doubt this levy was controversial for many. This proposal sought to achieve a 5% tax on developers of residential subdivisions, visitor accommodation, and retirement villages to help fund affordable housing. This plan was being closely watched by other councils with some considering following suit had Queenstown paved the way. However, following feedback from landowners and developers, the Queenstown Lakes District Council will now have to conduct further research and explore other options to source the funding. Yay for investors in our Queenstown Ladies Mile syndicate (they aren’t developers but will mean we won’t have value erosion). Which by the way we bought in Dec 2018 for $5m and the latest valuation is $23m. If you would like to know more about these kinds of opportunities contact Daniel Young at dyoung@erskineowen.co.nz.
• Housing consents drop 24% to lowest level in 5 years (source) Should we be surprised that housing consents were down in June compared to the same time last year? Well, given interest rates and the cost of living being high perhaps not. Statistics NZ is saying that the new Matariki holiday may have contributed due to the lower number of working days in June available to process consent requests. While the dips were nationwide, Wellington consents fell considerably in both the regions and in the central city, with the regions recording a 36% drop and the central city a 69% drop. According to Statistics NZ, a decrease in apartment consents could be the main driver for the large dip. Chris Bishop will be having kittens…he needs more houses. If I was him, I’d be thinking – what can we do to stimulate building activity? Hmm – I know drop interest rates. Orr won’t answer calls, so I’ll wander down the hall and tell Luxon I can’t do my job if the OCR doesn’t start dropping soon and he should take Orr out to lunch. 

We hope you enjoyed reading this issue of the Weekly Property Roundup and we have saved you the trouble of seeking out some of this key information yourself. Have a fabulous weekend and remember to look out for this email again this time next week.

From the team at Erskine Owen.