Property

Details emerge of property investor tax exemptions

Consultation opens today on how new builds will be exempted from investment property tax changes, in rules to be in place by October 2021.

Friday, June 11th 2021

The government made a shock announcement in March to remove a longstanding tax “loophole” that let property investors reduce tax bills by deducting mortgage interest payments against their rental income.

At the time, it said the changes would not include new builds.

Consultation documents out today detail the proposals to stop interest deductions being claimed for residential investment properties.

This includes how the new build exemption might work in terms of the interest claim limitations and the application of a five-year brightline capital gains test, rather than the ten-year test for other residences.

The proposal document suggests conversions from commercial to residential are counted as new builds and asks whether heritage buildings being substantially altered should count as new builds.

There may also be exemptions for subsequent purchasers of new builds.

As well as excluding the family home, the proposal is to exclude non-residential properties, employee accommodation, farmland and care facilities.

It would also not include interest related to the main home, for example, if an owner lived with their tenant.

Community housing providers which are charities would be exempt as would state home builder Kāinga Ora.

The consultation closes on July 12. The discussion document can be viewed here.
The initial measures were part of a package of attempts by the government to cool the housing market, but Auckland realtor Barfoot & Thompson said earlier this month the market was unfazed.

Managing director Peter Thompson said April's positive momentum had carried into May, reflected in sales numbers at their highest level for the month in four years.

The median price across the realtor's 1,197 confirmed sales was $1.07 million, 2.2% ahead of the prior month and 17.5% higher than May last year.

Comments

No comments yet

Heartland Bank - Online 1.85
ICBC 2.15
SBS Bank Special 2.19
HSBC Premier 2.19
HSBC Special 2.25
Kainga Ora - First Home Buyer Special 2.25
The Co-operative Bank - First Home Special 2.29
Kiwibank Special 2.49
The Co-operative Bank - Owner Occ 2.49
ANZ Special 2.50
TSB Special 2.50
Heartland Bank - Online 2.35
ICBC 2.35
HSBC Premier 2.45
Kiwibank Special 2.49
SBS Bank Special 2.49
China Construction Bank Special 2.65
Resimac 2.79
TSB Special 2.89
The Co-operative Bank - Owner Occ 2.89
Westpac Special 2.89
ANZ Special 2.90
China Construction Bank Special 2.99
HSBC Premier 3.19
ICBC 3.19
Kainga Ora 3.37
Bluestone 3.54
Select Home Loans 3.54
Resimac 3.54
SBS Bank Special 3.59
The Co-operative Bank - Owner Occ 3.79
TSB Special 3.79
Westpac Special 3.79
ANZ Blueprint to Build 1.68
ASB Back My Build 1.79
Heartland Bank - Online 1.95
Resimac 3.39
Bluestone 3.49
Select Home Loans 3.49
ICBC 3.69
Kiwibank Special 3.75
Kiwibank 3.75
Kiwibank - Offset 3.75
The Co-operative Bank - Owner Occ 4.40

More Stories

LVRs kicking in for Auckland house prices

Friday, July 16th 2021

LVRs kicking in for Auckland house prices

The loan-to-value (LVR) restrictions reintroduced by the Reserve Bank are having a far greater effect on Auckland house prices than anywhere else in New Zealand.

Dire shortage of properties for sale

Wednesday, July 14th 2021

Dire shortage of properties for sale

The total number of properties for sale across the country dropped by 33.3% last month. The second lowest level of inventory ever, REINZ data shows.

ASB hikes rates across the board

Wednesday, July 14th 2021

ASB hikes rates across the board

ASB has become the first major bank to hike interest rates across the board as New Zealand's economic outlook improves.

Investors urged to bolt in long-term rates

Tuesday, July 13th 2021

Investors urged to bolt in long-term rates

With high inflation just around the corner, ANZ Bank, the country’s biggest mortgage lender, says mortgaged property investors would be wise to fix at least some of their borrowings at longer-term rates.