Mar 2021 – Rental Property Tax Changes Update

23 March 2021

With todays announcement from the Minister of Finance, the government has announced significant proposed changes for residential property acquired on or after 27 March 2021. We wanted to provide this urgent InfoBase update to help you navigate through these changes and understand what they might mean for you.

The proposed changes and guidance (follow the links) from IRD include:

  • Extending the bright-line test to 10 years
  • Amending the main home exclusion which would require tax to be paid on gains made for periods the property is not used as the owner’s main home
  • Allowing newly built homes to use a 5 year bright-line test
  • Not allowing property owners to claim interest on loans used for residential properties as an expense against their income from those properties. This would start from 1 October 2021, and would also be phased in over 4 years for existing properties. There would be an exemption for newly built homes.

We will continue to provide updates on this as they come to hand, if you have any further questions please get in touch with your accountant.

We hope this update is useful for you and helps to provide some clarity. We will review and update all of our other rental property articles in the InfoBase over the coming weeks to reflect these changes.

 

About Kiwitax – Award winning business improvement, tax and accounting service

Here’s the thing. As a rental property owner, you get a kick out of having your own gig. But chances are dealing with your tax and accounting leaves you cold. Good news! We love it, so hand it over to Kiwitax and we’ll look after it all for you.

Whether you deal with us online, by phone or drop into our Napier office, you’ll find a friendly, professional hardworking team ready to work with you, however you keep track of your financial information and from wherever you do business. And all for a fixed price. It takes just two minutes to get a quote.

Plus if you’re at a loss to know how to improve aspects of your business – from growth planning to cashflow management, even tax debt and so much more – we’re all over that too. Our Business Improvement advisors can help you make a plan and put it into action.

Kiwitax are a preferred training provider for Business Improvement services through the Regional Business Partner Network Capability Voucher Scheme. This is a government funded scheme designed to boost business capability by providing funding of up to 50% of approved training programs with specified training providers up to a maximum value of $5000.

If you liked this article and want to make improvements in your business, with quarterly coaching sessions specifically tailored to support you to identify and achieve your business goals, lets chat!

Share this