The leaky homes crisis represents one of the most severe problems faced by New Zealand’s property sector and continues to cause stress and anxiety for those affected. Adding to the uncertainty for rental property owners has been the question of whether repair costs are immediately deductible as ’repairs and maintenance’ (R&M). Inland Revenue has assisted …
The buoyant covid subsidy funded days are behind us, New Zealand has entered a ‘technical’ recession. This was reinforced by the recent announcement that New Zealand’s corporate tax paid was almost 11% down in the 11 months to May relative to Government expectations. A drop in the corporate tax take reflects the declining profits of …
On 31 March 2023, Inland Revenue released a draft interpretation statement (PUB00417) addressing the deductibility of land holding costs – namely, interest, rates and insurance – and the relevance of whether the land is taxed on disposal. This had been an area of uncertainty since the introduction of the residential bright-line provisions in 2015, which …
Greetings, The government has finally decided that we are in recession. The people (Tax payers) knew this, way before Christmas and were starting to adjust their spending habits – less lattes, less haircuts (I have been saving on those since 1/1/2000). You can see the impact of this now in the cities as mortgage interest …
Despite recent reductions in property prices, there is little doubt that the passion New Zealanders have for investing in residential property will survive. However, the tax treatment of residential rental investments has increasingly become a tangled web of complexity due to changes in legislation over the past few years. It used to be that ‘mum …
In 2017 Inland Revenue released an Interpretation Statement, IS 17/02, which formalised the long-standing practice of allowing a farmer to claim a portion of their farmhouse expenditure on the basis it is the “headquarters” of the farm. But then in 2020 Interpretation Statement IS 20/05 was released by Inland Revenue which overthrew the common practice …
There are common misconceptions in relation to how portfolio shareholdings in foreign companies are treated for tax purposes. One misconception is that if either the profits of the foreign company or the dividends it pays have been subject to tax overseas then New Zealand (NZ) tax does not apply. Another is that if the foreign …
Residential property acquired after 27 March 2021 is subject to a 10-year bright-line period, or 5 years if the property qualifies as a ‘new build’. The extension to 10 years has increased the likelihood that a property transfer will be caught. In an attempt to alleviate the risk that related party transfers would be unfairly …
On 30 March 2022, the Taxation (Annual Rates for 2021-22, GST and Remedial Matters) Act 2022 received Royal assent. Its passing into law brings with it the extension of the residential bright line period from 5 to 10 years and denial of interest deductibility for residential investment properties. The legislation itself is complex and difficult …
On the 23rd March 2021 the Government announced that it would make a number of changes to the taxation of residential property to address housing affordability. Legislation has been enacted implementing some of the announced changes, whilst the balance are to be consulted upon before further legislation is drafted. Legislated changes – The bright-line test …
