It’s a busy time of the year, and the last thing you’ve got on your mind is sending a newsletter to your clients. The thing is, a lot has happened lately that might impact some of them. So here are a few ideas you could send them this week.
Returning the Bright-line Test to 2 Years
The coalition government has officially affirmed alterations to the ‘bright line’ income tax regulations pertaining to the sale of residential land effective from 1 July 2024 onwards. Finance Minister Nicola Willis has clarified that “properties sold after 1 July 2024 will only be subject to the [bright line rules] if owned for less than two years.” Copy this article here.
Removing Building Depreciation
Depreciation is the reduction in the value of an asset over its useful life. This is accounted for based on a rate predetermined by the IRD.
In commercial property in New Zealand, depreciation refers to the reduction in the value of a commercial property over time due to wear and tear, ageing and becoming outdated.
For tax purposes, depreciation is the annual deductible expense allowed over the asset’s useful life. Allowing depreciation on commercial buildings creates a timing difference for tax where the future sale of a property at or above its book value results in accumulated depreciation becoming taxable income. Copy this article here.
Top 8 Year-End Tips for Businesses
The end of the financial year can be a stressful time for many businesses, but with careful planning and attention to detail, you can make it a smooth and efficient process. Copy this article here.
Mortgage Rate Deductibility
Effective immediately, landlords can claim a portion of their interest costs against rental income. The portion you can claim will be increased over the next two financial years.
Starting with 60% in 2024, 80% in 2025, and 100% by 2026.
These adjustments aim to support landlords amidst evolving tax regulations. While these changes are significant, their immediate impact on the property market may be limited. However, they signify positive steps toward enhancing landlord stability and market predictability. Copy this article here.
Changes Ahead for Rental Income Taxation
There are significant adjustments on the horizon regarding the taxation of rental income. Let’s look at the critical alterations set to take effect in the coming fiscal year. Copy this article here.
I hope this is useful and the end of year goes smoothly for you.
