There have been a lot of changes to legislation affecting property investors in the last couple of years. There have been changes in Healthy Homes Standards, Loan-to-value ratio (LVR), heat pumps requirement and claiming interest as an expense.
For many years, the Government has tried to disadvantage property renovators and property traders. They are attempting to penalise property traders by bringing in CGT but property traders pay tax like everybody else. Property traders must pay a third of their profit in tax, plus real estate costs. Property traders can claim interest as an expense like other businesses but property investors cannot.
The loss of claiming interest as an expense is being passed in the next four years and landlords are expected to sell. Many Kiwis want to improve wealth by owning rental properties but this strategy doesn’t seem affordable anymore. If property investors cannot afford owning rental properties anymore, where will tenants live?
More rentals are being taken out of the market so there are more homeless people. It is expected to get worse in the next couple of years. There were plenty of expenses in a short period of time, crippling some property investors who were forced to sell instead of putting the money into another rental. It would’ve assisted the housing shortage.
Our Business Clients
Cam recently caught up with Grant Douglas, owner of Makers Fabrication, to get his perspective on a few things. If you want to chew the fat with Grant further – get in touch and we’ll set it up.
Besides being pretty all-round top blokes, Matt and AJ are bloody screwed on when it comes to growing their business and smashing their goals.
Flick us an email or give us a buzz!
Outside Accounting
Address: Level 2, 182 Vivian Street,
Te Aro, Wellington 6011 New Zealand
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975
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