National would reverse at least two of the Government's proposed housing measures if elected to power, Judith Collins says.
Jacinda Ardern's administration on Tuesday revealed a list of proposed measures intended to tilt the market away from rampant property investment and towards first-home buyers locked out by skyrocketing house prices.
Among those announced was an extension of the bright-line test and removing the ability for landlords to offset their interest expenses against their rental income when calculating their tax. Both measures are meant to reduce investor demand.
But if National returns to power, the changes would be reversed.
The bright-line test was introduced in 2015 under the previous National Government, and at the time, forced those who purchased and sold a residential property - that wasn't their main/family or inherited home - in under two years to pay a tax on any gains.
In 2018, the new Labour Government extended it to five years, and on Tuesday, Ardern announced it would be extended to 10 years. New builds will be exempt from the change.
Speaking to The AM Show on Wednesday, National leader Judith Collins questioned whether the extension would have any effect on lowering house prices and said the test had moved too far away from its original purpose.
"We put it in for two years and that was to pick up those people who were buying and flipping houses in a very short period of time," she said. "What has happened is Labour has come in and they shifted it up to five years. Now they are saying that someone who owns a house for nine-and-a-half years is flipping it for profit."
She also took issue with another change to the test.
If a property owner uses a home as their main home for the entire time they own it, it will continue to be exempt from the bright-line test.
However, for those properties acquired after this coming Saturday, a tax may be applied if the property isn't used as the owner's main home for more than 12 months at a time within the bright-line test period. The tax will be calculated on the time it is not used as a main home.
Collins says that might catch some people out who have no other choice than to leave.
"If you are one of these first home buyers and you manage to buy a house, and you get transferred in your work or you lose your job and you can't live in your house for over a year, now you are going to get subject to this capital gains tax."
She wants to take the bright-line test back to how it was in 2015.
"We won't just take it back to five years, we will take it back to the two years which was set up to catch people who buy the house and flip it on. The only reason to have it in the first place is because the test at that time was simply that people were buying for the intention of resale for profit."
The interest deductibility change would also be reversed if National had its way, with Collins concerned that landlords are simply going to pass the additional expense onto their tenants, forcing rent prices up even further and hurting potential first home buyers' ability to save for a deposit.
The Government's housing measures come after a year of double-digit growth in house prices fuelled by removal of loan-to-value ratios (LVRs), the return of thousands of Kiwis from overseas, and a supply shortage.
Ministers used the massive growth to justify some of Tuesday's announcements, including the bright-line test extension, which Finance Minister Grant Robertson ruled out on the election campaign trail last year.
Collins has accused Labour of lying to New Zealand, but Robertson defended himself on Tuesday by saying he had been "too definitive" when speaking about the bright-line test before last year's vote. He said Kiwis expected the Government to address the housing crisis, and that was what it was doing.
