TaxJack Accounting and Management Services Ltd

𝐑𝐄𝐒𝐈𝐃𝐄𝐍𝐓𝐈𝐀𝐋 𝐈𝐍𝐕𝐄𝐒𝐓𝐌𝐄𝐍𝐓 𝐏𝐑𝐎𝐏𝐄𝐑𝐓𝐈𝐄𝐒

𝑨 𝒒𝒖𝒊𝒄𝒌 𝒐𝒗𝒆𝒓𝒗𝒊𝒆𝒘 𝒐𝒇 𝒕𝒉𝒆 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒍𝒊𝒎𝒊𝒕𝒂𝒕𝒊𝒐𝒏 𝒑𝒓𝒐𝒑𝒐𝒔𝒂𝒍𝒔 𝒓𝒆𝒍𝒆𝒂𝒔𝒆𝒅 𝒃𝒚 𝒕𝒉𝒆 𝑮𝒐𝒗𝒆𝒓𝒏𝒎𝒆𝒏𝒕 𝒐𝒏 28 𝑺𝒆𝒑𝒕𝒆𝒎𝒃𝒆𝒓 2021

The proposal is that, from 1 October 2021, interest will not be deductible for residential property acquired on or after 27 March 2021. For properties acquired before 27 March 2021, generally investors’ ability to deduct interest will be phased out between 1 October 2021 and 31 March 2025. Some properties are excluded from these rules and some exemptions are proposed.

One of the exceptions that affects most property developers is a NEW BUILT exemption, A property that received its code compliance certificate on or after 27 March 2020 will be eligible to deduct interest for up to 20 years from the time the property’s code compliance certificate is issued. The exemption will apply to both the initial purchaser of the new build and any subsequent owner within the 20 year period.

Full details of the proposed bill are available on IRD and Parliament website

If you need advice as to how the proposed changes would affect your Residential property investment situation, please contact us to book a consultation.