Keith Melville

Isn't it time that a feature topic in many newspapers including The Beacon, in the past few years, the so-called tax break for landlords - is seen for what it really is?

It is a gross distortion, a myth, spread by the left or anyone else envious of or with a grudge against landlords.

Every business that borrows money from the bank for business purposes - builders, farmers, retailers, manufacturers and any other, is entitled to claim interest as a tax deductible expense when they work out their taxable income.

The previous Government acting against the advice of Inland Revenue, and in contravention of international accounting standards, singled out private landlords for special punishment by cancelling their right to claim interest as a business expense.

For many residential property investors the removal of interest deductibility meant they had to ignore interest on housing loans as a business cost and were therefore liable to pay more tax proportionately, than other businesses.

That penalty was cancelled when the current Government re-introduced interest deductibility for private landlords. It is hardly a tax break or mortgage relief as claimed in the Herald letters recently. It is simply a tax deductible business cost.

One of our Whakatane council candidates Dave Stewart is continuing to spread the tax break myth as part of his bid for election.

In support of his campaign for rates reforms Dave said in Friday's Beacon if the government can part with $3 billion (which he rounded up from $2.9 billion) for landlords it can afford to return the $1.2 billion GST portion on rates back to councils.

Mr Stewart does not seem to realise that the $2.9 billion represents the penalty portion removed from landlord tax declarations when the Government reintroduced interest deductibility. It does not represent additional money directed into landlord pockets.