Housing

Leaky home repairs concluded as not deductible

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 …

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Tax ourselves out of recession?

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 …

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Deductibility of holding costs for land

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 …

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Residential property – A class of its own

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 …

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Update – GST on farmhouses and holiday homes

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 …

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Government addresses housing affordability

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 …

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