Tax Deductions for interest expenses on rental properties will be restricted from 1 October 2021. This would mean that if you acquire a residential investment property on or after 27 March 2021 interest will not be tax deductible from the income you earn on your investment. The interest deductibility for residential investment properties acquired before 27 March 2021 will gradually be phased out between 1 October 2021 and 31 March 2025.
However, new builds will be exempt from these interest deductibility rules. For instance, if the property got its code compliance certificate on or after 27 March 2020 the interest will be deductible for up to 20 years from the time that the code compliance certificate is issued. The exemption will apply to both the initial purchaser of the property as well as any subsequent owner within the 20 year period.
For people looking to buy property as an investment, these may be important factors to consider. We recommend that before buying or selling a property that you obtain advice from a property lawyer. For more information on this or any other legal issues you can contact Kemp Barristers & Solicitors at info@kempsolicitors.co.nz or 412-6000.
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