Amongst other things, there will most certainly be recommendations on future tax treatments on rental property. A range of burdensome measures including a new land tax has been flagged as has a capital gains tax, however the latter has been ruled out by the Finance and Prime Minister. In other tax developments see the following items.
The IRD have reportedly won a court case ruling that taxpayers cannot use a Loss Attributing Qualifying Company (LAQC) in order to claim deductions for expenditure incurred for a private home. [ie where the property owner rented the home from him/herself and claimed tax deductions on him/her losses].
The IRD say that using an LAQC to own property rented to an arms-length tenant, the tax deductions would be acceptable. It is also reported that the IRD seems to accept deductions on beach houses, provided landlords actively made them available for rent.
The Revenue Minister Peter Dunne has announced a review of GST rules pertaining to the sales of land and other high-value assets.
Of interest to the Federation is the discussion document released 5 November proposes clarifying the boundary between residential accommodation, which is GST-exempt, and commercial accommodation, which is not. It is suggested, this would ensure better consistency of GST treatment of equivalent types of accommodation.
The wide-ranging proposals seek to resolve the uncertain tax treatment of rental holiday homes, baches and serviced apartments.
Submissions close on 18 December.
The discussion document, “GST: accounting for land and other high-value assets”, is viewable at http://taxpolicy.ird.govt.nz/publications/index.php?catid=2
New legislation governing real estate agents came into effect during the month (17 November). There are new regulations for all agents, and new protections for buyers and sellers of residential and commercial property. Of note, residential leasing is excluded from the Real Estate Agents Act and all licensed agents will be recorded on a public register.
Energy and Resources Minister Gerry Brownlee has announced (20 November) a change to improve the delivery of its Warm Up New Zealand Heat Smart home insulation scheme. The change sees the fund become a multi-year appropriation allowing flexibility to bring funding forward to meet demand.
The demand for the programme by owners of rental properties has been significant in the first four months of the scheme.
The latest set of figures show almost 2900 rental homes were retrofitted in the first four months of the scheme.
| House type | Jul09 | Aug09 | Sep09 | Oct09 | Totals |
| Low income - rental | 348 | 367 | 576 | 974 | 2265 |
| General income - rental | 120 | 163 | 169 | 179 | 631 |
| Totals | 568 | 530 | 745 | 1153 | 2896 |
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