At this early stage, there will always be unknowns as ministers assess new legislation and review existing policies.
One key area to watch will be the tax treatment of property investors.
National plans to shorten the bright-line test for property investors to two years from 10 years, returning the law to its 2015 setting. From 1 July 2024. New builds will not be exempt from the two-year bright-line.
Interest deductibility for property investors will also be phased back in, reversing Labour’s ‘phased-out’ ban on interest deductions.
Interest deductibility will be 60% in 2023-24, 80% in 2024-25, and 100% in 2025-26, the coalition government confirmed in November.
National’s proposed restrictions on foreign persons acquiring residential properties for more than $2m in New Zealand and the proposed 15% ‘foreign buyer tax’ on such purchases have been quashed as part of the coalition government negotiations. Accordingly, any expected change in demand for residential property from this proposed change has gone.
Tax deductions for depreciation on commercial and industrial (non-residential) buildings will also be removed from the 2024-25 income year.
There will be plenty of other changes as the year progresses. Keep up to date by engaging with your industry body, reading the news, and talking to us and your other advisers as policies develop.
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