Property Tax Changes
The Government has finally released the proposed change in taxes in relation to properties.
Interest Deductibility
Interest paid on loans in relation to residential rental properties (including holiday homes) will remain at 50% claimable for the 2024 tax year.
From 1 April 2024, the % claim will increase to 80% and then to 100% from 1 April 2025.
Also those that currently cannot claim any interest will be able to claim from 1 April 2024 using the above %’s.
Brightline
The time period will reduce to 2 years for all properties, effective from 1 July 2024. There was talk about a backdating of this but this does not look like it has been included.
This is just one of the changes within the Brightline tax rules and they still remain a complicated tax ie date of purchase and date of sale do not use the same criteria ie one is one settlement and one is on date of the contract.
If you are considering selling a property that is not your main home please contact us to make a time to talk through any tax issues.
Commercial Building Depreciation
This is stopping from the 1 April 2024 (technically changing to 0%). It was only a deferral expense anyway. Any depreciation claimed in the past could still be recovered in the event of sale.
At the time of writing, none of the above has actually been passed into law but the expectation is that it will be done so before 31 March.