The Preferential Income Tax Treatment Of Owner Occupied Housing PDF Download

The maxim “my house is my castle” encapsulates what may be described as “the Castle Doctrine”, which views an owner-occupier's house as a unique type of property worthy of special policy and legal consideration. Legislative privileging of the owner-occupied house is manifest, inter alia, in national and local taxation. However, rather than the house, it is the home, principally a psychological concept, which might warrant policymakers' and legislators' attention because of its presumed contribution to human wellbeing. In this scheme, ownership of the occupied property is a secondary consideration so that, to the extent practicable, owner-occupiers and tenants should be treated evenly. Since local authority rates are the only tax specifically levied on real property in New Zealand, a principal question this article seeks to answer is how such even-handedness might play out in the field of local taxation. The article, which has a particular contextual focus on Auckland, where a housing shortage is acute, is structured as follows. First, the concept of home is outlined. Following Margaret Radin's distinction, the possibility of the space identified as home being personhood, rather than fungible, property is considered. Second, the benefits of owner-occupation are discussed with a focus on tax privileges. Third, the nature of local authority rating is considered. Different classes of ratepayer are identified in order to reveal inequitable treatment of these different classes. Fourth, the issues of local authorities' inability to achieve equity outcomes and of efficiency are noted. Finally, conclusions are drawn.