Christopher Luxon's properties affected by density laws he plans to scrap

Friday, 9 June 2023

The phase out of mortgage interest deductibility is likely to lead Brianna Kerridge to sell one of her properties, unless National returns.

Five of Christopher Luxon’s seven properties can have more townhouses or apartments built next door under the Medium Density Residential Standards (MDRS) –a law which was passed with bipartisan support, but which National has now said it will repeal if elected in October.

That includes his five-bedroom Remuera home, which shifts from being zoned for standalone homes up to two storeys with landscaped gardens, to allowing three homes of up to three storeys under the MDRS.

While individual landowners could benefit in the short-term from the ability to subdivide a property into more homes under the MDRS, a shift away from higher density is forecast to lead to higher prices in the long-term.

Luxon’s property portfolio has fallen an estimated $6.7 million in value during the current downturn, according to CoreLogic data.

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National said it would replace the density rules with a requirement that councils open up land for 30 years of housing development.

Christopher Luxon’s “Get NZ back on track” tour was in New Plymouth on Friday.

Its other property policies include reversing the Government’s move to stop landlords being able to deduct mortgage interest from rental earnings for tax purposes, and reducing the bright-line test from between five and 10 years to two years, making it easier for investors to avoid any capital gains tax.

Renters United president Geordie Rogers said Luxon’s property portfolio, which is currently valued at over $16m, should be considered a conflict of interest.

We talk to CoreLogic head of research Nick Goodall, and evaluate the signs that house prices are bottoming out, and the wind changes that could send them falling again.

Luxon’s properties include a five-bedroom home in the Auckland suburb of Remuera, a four-bedroom home on The Strand on Waiheke Island, three standalone properties in Onehunga, an apartment in Thorndon, Wellington, and a three-bedroom property in Northpark in Auckland, which was switched to commercial use in November 2021, and now serves as his campaign office.

“I think in Christopher Luxon’s case he earned more money during the pandemic in capital gains than he did as leader of the National Party, so there’s obviously a conflict of interest there at a massive scale,” Rogers said.

Rogers said given the amount of property Luxon owned, it was a larger conflict of interest than that of Michael Wood, who was stood down as transport minister over $13,000 of shares in Auckland Airport, which were not properly declared, and about which the Cabinet Office had asked him 12 times.

At a stand-up on Wednesday Luxon was asked whether he would sell any of his rentals if he became prime minister, or whether his property holdings constituted a conflict of interest.

Luxon did not answer either question in his response.

“We’re going to be crystal clear with every minister about their conflict and make sure that they are mitigated and managed incredibly well,” he said.

Written questions regarding how Luxon’s tax bill had changed since the phaseout of mortgage interest deductibility began, how much debt his properties carried, or how his portfolio value might change under current rules, compared to the more investor-friendly rules National would bring in, were also not answered.

“Luxon’s disclosures to the Register of Pecuniary Interests are in order. The point of such a register is to disclose investments, which he has done,” a National spokesperson said.

“Michael Wood’s situation is different, with his shareholding in Auckland Airport not disclosed for many years, and not managed properly when it was – despite the best efforts of the Cabinet Office.”

The spokesperson said National’s housing policy was not influenced by the leader’s personal interests or those of the rest of the caucus.

The coming election is shaping up to be a crossroads for New Zealand’s property market.

One investor told Stuff she planned to sell her fourth property if Labour won, and had pre-approval to buy a fifth if National got back in.

Average property prices have fallen $121,000 since they peaked, but remain $194,000 higher than pre-Covid, according to CoreLogic.

Rogers’ criticism of a property portfolio being a conflict of interest was not limited to the National Party leader.

He said many politicians owned multiple properties, and there was a correlation between the number of properties politicians owned, and the friendliness of their policies to investors.

“I think it’s really a no-brainer that with so many politicians and parliamentarians owning not just one, but a multitude of properties, that we don’t see pro-renter legislation passed through parliament,” he said.

According to the most recent Register of Pecuniary Interests, 80% of National MPs own more than one property, and just under half of Labour MPs owned more than one.

Green Party spokesperson for renters Chloe Swarbrick said records showed that politicians tended to hold more wealth than the average New Zealander. “This is especially the case in terms of the disproportionate number of landlords in the House. There’s approximately 120,000 landlords in New Zealand – or, approximately 2.4% of the population – while approximately half of our Parliament own interests in more than one property.

“The broader trend, of a Parliament disproportionately composed of landlords moving slowly, and often only when forced, on the rights of 1.4 million renters in this country paints a pretty clear picture of where power sits in this country.”

Only Green Party co-leader Marama Davidson, Tourism Minister Peeni Henare, Labour MP Ibrahim Omer and ACT MP Damien Smith did not own or have any interests in property.

Prime Minister Chris Hipkins listed two family homes in Upper Hutt and a residential property in Raumati.

National MP Gerry Brownlee is another with a large number of properties, though he lists one fewer in Christchurch this year than in 2021 – citing two in Christchurch, one in Wellington, one in Marlborough and one in Marlborough Sounds.