Improving landscape for residential property investors: interest deductibility & bright-line rule changes

In recent times residential property investors have felt the weight of evolving tax policies and higher interest rates. However, with changes to interest deductibility and the bright-line rules in the coming financial year, there is appears to be a more favourable investment landscape ahead.   Interest deductibility A concern for residential property investors has been the limitations on interest deductibility. Under the previous Labour government, the ability to offset mortgage…  Read more

“App tax” coming 1 April 2024: GST on all Airbnb and digital platform services 

The new National coalition government has decided to keep the “app tax” initiated by the previous Labour government in 2023. During election campaigning National had promised to reverse the change that would have seen GST imposed on accommodation and transportation providers on platforms like Uber and Airbnb. However, now as they seek means to fund their coalition policy initiatives, they’re sticking with Labour’s plan, and the change will happen next…  Read more

Tax considerations for short-term vs long-term residential rental income

Owning a residential rental property can be a lucrative investment, providing a steady stream of income for property owners as well as long term capital growth. However, when it comes to tax considerations, the type of rental income—short-term or long-term—can significantly impact your financial obligations. Whether you are a short or long-term rental property owner in New Zealand, you must report your earnings on your annual income tax return. It’s…  Read more

GST & Unit Title Bodies Corporate (UTBC)

The IRD has recently published an interpretation statement (IS 23/08) to provide guidance on how GST applies to different transactions between a unit title body corporate, its members, and third-party suppliers. A UTBC is a separate legal entity to its members.  It can decide whether to register for GST.  UTBCs are generally considered only making taxable supplies to their members in the form of members’ levies.  The value of supplies…  Read more

Guide to deductible and non-deductible expenses for residential rental properties

If you own a rental property, it is important to understand what expenses are deductible to help lower your tax burden. Deductible expenses Generally, for an expense to be deductible, it needs to be incurred in generating the rental income while the property is either rented out or has been made available for rent. These expenses include ongoing and holding costs: Rates Insurance Cleaning Accounting fees Property management fees Travel…  Read more

Are repairs to your flood-damaged property tax deductible?

Northern New Zealand has seen an absolute deluge recently which has caused terrible damage to roads, houses and even caused deaths. While people begin the clean up, those who use their property to earn a rental income might be wondering, “are the repairs to my flood damaged property tax deductible?” As is often the case with tax law, the answer is “it depends”. Generally, if you replace an item like…  Read more

GST rules for Airbnb operators set to change

A change to the rules around how GST applies to services in the platform economy, such as Airbnb and Uber, will likely come into effect on 1 April 2024 as part of the Taxation Annual Rates for 2022-23 Platform Economy and Remedial Matters) Bill (No 2). The proposal The Bill proposes that GST is to be levied on all platform economy supplies. For the individual suppliers who are not registered…  Read more

Can you be liable for income tax on the sale of your family home?

The Bright Line Test is not a new rule , it was introduced by the John Key led National party and took effect from 1 October 2015. The purpose of the test is to ensure that tax is paid on profits where properties are bought and sold within a short amount of time. Some of these transactions would have been taxable anyway under the various rules that already existed to…  Read more

Am I a tax resident in New Zealand?

Sometimes it is hard to answer a seemingly simple question. It is important to know the answer though as most New Zealand tax residents need to pay tax in NZ on income they have from any country in the world (their “worldwide income”) but non residents only need to pay tax on income that has a New Zealand source (source itself can be hard to determine in some situations but…  Read more

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