Prime Minister Christopher Luxon. Photo: RNZ / Samuel Rillstone
Prime Minister Christopher Luxon has put another of his rental properties on the market, moving to sell a third property in his mortgage-free portfolio.
One of the three Onehunga houses Luxon has owned was listed for sale on Friday, with an auction set for 31 October. He bought the two-bedroom property in 2015 for $620,500, and its current market valuation, according to Homes.co.nz, sits at $995,000.
The property listing was the third for Luxon in as many months, after he sold a different two-bedroom unit in the 1980s Onehunga housing development in September for $930,000, and his Wellington apartment for $975,000, after moving into the prime minister's residence, Premier House.
These two properties, which according to public disclosures were among seven owned by Luxon mortgage-free, were sold for $130,000 and $180,000 more than he bought them for, respectively.
With the sale of this latest property, Luxon's publicly disclosed portfolio will reduce to four mortgage-free properties, including a third Onehunga rental, family homes in Remuera and Waiheke, and his Botany electorate office which he charges Parliament $3750 in monthly rent for, as allowed for under its rules.
An Onehunga two-bed home listed for sale on Friday has been owned by Prime Minister Christopher Luxon as an investment for nearly a decade. Photo: Trade Me
Luxon has routinely declined to discuss the property sales, and on Friday a spokesman said the management of Luxon's properties were a private matter unrelated to his being prime minister.
But the prime minister's wealth has attracted interest, and political controversy, given the sale of his Wellington apartment appears to have benefited from his government's change to the bright line test for taxing investment property sales.
Labour deputy leader Carmel Sepuloni earlier this month said Luxon was a "high-profile example" of untaxed income, as he had made "half a million dollars, simply by buying two houses and selling them a few years later".
Under the prior bright line test rules, the sale of Luxon's Wellington apartment would have attracted property sales tax on any capital gain, as it was bought between 2018 and 2021, and sold within five years.
But the government changed the bright line test on 1 July, lowering the threshold to two years after purchase.
However, neither the Onehunga property sold or for sale would have met the bright line threshold under the old or new rules, as he purchased both in 2015 and owned them for nearly a decade.
Property experts earlier this month cautioned against suggestion Luxon would have made nearly $500,000 in untaxed profit, given the likely cost of property improvements and fees for real estate agents and lawyers.
Wellington real estate agent John Kettle, who appraised the value of the Wellington apartment for the prime minister, told The Post Luxon had made significant improvements to the property.
"So, it's fair and reasonable to expect that they will make some margin on it."
Ed McKnight, economist at property investment firm Opes Partners, said the capital gain Luxon made on the apartment could be closer to $70,000, when factoring in the "ballpark fees" of a property sale, 5 percent of its value, and renovation costs of, for example, $60,000.
"There would be a capital gain, and he probably would have paid bright line had he sold today and the old bright line test was still in place, but with that very important caveat that the prime minister is not an idiot," he said.
"If the old rules were still in place, he likely would have decided to rent out the property to somebody else for a year before selling it ... that's what the usual advice would have been."
- This story was originally published by Stuff.