Now another government move to reduce property speculation and decrease house prices is gaining momentum with the publication of an IRD issues paper.
Proposed taxation changes
The latest initiative will attempt to curb investment in New Zealand property. The plan is to ‘ring fence’ residential rental losses. Tax payers would be unable to offset rental losses against their other forms of income. Instead any loss would be carried forward, awaiting future property related taxable income. The proposed legislation would take effect in the 2019/2020 tax year. Phasing-in may take two or three years.
Be part of the process
We work closely with Withers Tsang, a chartered accountancy firm, and have done over many years. So when we heard its director and founding partner, Mark Withers, was preparing a response submission; we were keen to ensure our clients had a chance to have their voices heard. Mark will include the views of residential investors, gathered through an online survey, along with his firm’s professional opinion. Key concerns are around a potential unintended disincentive for landlords to carry out repairs and the negative impact on new or smaller investors.