BEWARE – Landlord gets attacked
If you own a rental property read on..
If it wasn’t enough to have the Government make changes to the Tenancy law to increase the burden on landlords, the IRD are now getting in on the act!
Late last year, new legislation was introduced into Parliament for passing that will stop landlords being able to claim losses from residential rental properties against personal income or non-rental income. When first muted, the experts were suggesting that it wouldn’t apply until 1 April 2020 with the possibility that it is partially phased in from 1 April 2019.
However no the IRD are moving quick with implementation being 1 April 2019!
Basically the proposed law (1 expert went as far as calling it “a dog’s breakfast”) will mean that losses incurred from residential rentals will not be able to be claimed in the year they are incurred but rather have to be rolled forward to future years and only can be offset against rental profits. Amongst all of that there are some ifs and buts .. and then some conflicts!
So the year ending 31 March 2019 (this year) will be the last year that losses will be able to be offset so the immediate step to take is to consider what expenditure can be incurred before this date (ie bring forward any expenses so they can be claimed). One of the major items that you may be able to do is repairs and maintenance .. this means repairing NOT improving. The rules around this have also changes so please check with us beforehand so we can determine that it is claimable.
The other thing you need to be aware of after 1 April 2019, is that any tax refunds that you may have received to help fund the rental property won’t be there and there extra funds will be needed for the rental property.
If you wish to discuss please don’t hesitate to contact us.