New Government fund announced
Published: June 3, 2021
- Housing affordability
- Land for housing
- Urban development
In March 2021, the Government has announced measures to increase housing supply, improve housing affordability, and support first home buyers.
The key components of the Housing Acceleration Fund are:
- an infrastructure fund (to unlock a mix of private sector led and Government led developments)
- additional funding for the Government’s Land for Housing Programme to accelerate development of vacant or underutilised Crown owned land, operate in more regions, and deliver a broader range of affordable housing options for rental and home ownership.
The Housing Acceleration Fund will be complemented by:
- a Kāinga Ora Land Programme for strategic land purchases to increase the pace, scale and mix of housing developments (including more affordable housing).
- a refocused $350 million Residential Development Response Fund. This Fund was originally established to cushion the impact of COVID-19 on construction sector activity and jobs, but has not been required. The fund will focus on increasing affordable housing provision (rental and home ownership) on land owned by iwi and Māori groups, councils, community groups and private developers, through the Crown sharing some of the cost and risk.
- Extension of the "bright line test from 5 to 10 years, excluding new builds, for property acquired on or after 27 March 2021 (Main homes and inherited property remain exempt). Read the factsheet on proposed changes to the bright-line test on the Inland Revenue website.
- An in-principle decision to limit deductions for interest expenses on loans used to generate income from residential property. Key design decisions will be confirmed following public consultation, including how new builds should be treated. Read the factsheet on proposed changes to interest deductions on residential property income on the Inland Revenue website.
- An increase in First Home Products (First Home Grants and Loans) income and house price caps for both new and existing properties in some locations, to enable more first home buyers to purchase homes. With the tax changes this provides a significant boost for first home buyers.
These measures complement and build on what Government is already doing to improve housing affordability, including the :