July 1 Changes - Rent Drop Live-Blog!
8.55am: Welcome to this live blog from The Satiriser’s money desk. It’s July 1st and among the new laws coming into force today is the change in the bright line test from ten to two years. This move is expected to save property investors many thousands of dollars, savings which can be passed on in rent reductions to tenants currently under pressure in the cost of living crisis.
Our team will be reporting from around the country on rent reductions as they happen. Obviously it’s still early on in the day so right now landlords will still be notifying tenants of the good news. Expect a flood of reports as the day progresses.
9.30am: Nothing so far.
10.55am: While we’re waiting to hear of the first rent reductions just a brief explainer: up until today if you sold an investment property within ten years of buying it then you could expect to be taxed on the profit. From today that period drops to 2 years: buy an investment property, get someone in paying your mortgage and if you do sell any time after two years you get a tax-free capital gain. Which is nice.
It'll be interesting to see just how much this turn-up for the books for property investors will translate into rent relief for tenants once they’ve factored it in to their Excel spreadsheets. Which they’re probably still doing now. And double-checking. Before they pass on the good news.
12.02pm : Still no reports of rent reductions.
12.03pm: We’ve just checked and we do have the correct date.
1.08pm: Again while we’re waiting here’s a email from a reader who writes ‘Didn’t the government already give landlords a break by making their mortgage interest tax-deductible? How much did rents fall after that?’
That’s a good question, Bruce from Blockhouse Bay. From April 1st landlords have been able to claim an 80% deduction on their interest expenses. Which is nice. And from April 1st 2025 that will increase to 100%.
We’ve asked the head analyst of The Satiriser’s number-crunching team to go over the data and estimate how much rents have fallen as a result of this new tax deduction available to landlords.
Her reply: ‘Zero fifths of feck-all’.
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