Articles
Residential Interest Deductibility
Proposed changes to the Brightline Test and residential property interest deductibility were announced by the Government in March this year. Inevitably, this has left many people wondering what this will mean for them. While the details regarding the new build criteria and exemption relief for new build properties were not outlined, the Government has released a discussion paper to determine what the rules will look like. Because the changes are still in the discussion phase, they are not set in legislative stone just yet. However, we have pulled a set of resources together to come up with a useful summary of the proposed main changes to residential interest deductibility, as well as the proposed changes to the Brightline Test for residential properties.
The “Three Gremlins” of Residential Property Taxes
Three residential property taxation rules will come into play for the first time this financial year, ending 31st March 2022. The rules are targeted solely at land that is zoned “Residential” under the district plan. The legislation is very pointed as none of these restrictions are applied to commercial property. To understand the effect of these new rules it is best to describe how these changes have impacted on how things used to work for residential property taxes.
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