The Government recently announced a new tax incentive targeted at build-to-rent developers – and ‘mum and dad’ property investors aren’t happy. The new bill gives these developers an exemption from the tax deductibility limitations that are placed on most private landlords. Private landlords feel this new regime is unfair, according to Stuff. However, these build-to-rent
With all the changes the government has introduced to residential property investment, is now the right time to sell your rental property and cash up? We look at the reasons to exit the market – and the reasons to keep holding. Although property prices rose by over 30% in 2021, the predicted flatten out or
Buying or selling a business or a commercial property? There are new purchase price allocation rules you should be aware of. When land and buildings or a business is being sold, allocation of the purchase price between the business assets can result in different tax implications for the buyer and seller. In some situations,
The bright-line test’s main home exemption rules have been amended for residential land acquired on or after 27 March 2021. From that date the exemption rules will not be applied on an all-or-nothing basis for those property purchases, but instead the exemption will apply only for the period during which the property is actually used
It's becoming more common for a residential property to have several owners as this can significantly help with financing the purchase. It does, however, raise questions in regard to the bright-line test when acquiring property from co-owners. Here we look at whether the bright-line test applies in the scenario where a part owner of residential
As part of the government’s proposed changes to claiming interest deductions against residential property income, the interest deductions for rental properties acquired on or after 27th March 2021 (other than for new builds – but yet to be confirmed) will not be permitted from 1st October 2021. If money is borrowed on or after 27th
The Government has announced its plans to make the housing marketing more accessible for first home buyers. One key change is the proposed removal of deductions for interest on residential rental properties. The rules will apply to all investment properties other than potentially new builds. These rules have not yet been finalised and the
The government has announced the changes it is introducing to make the property market more accessible for first home buyers. One of these major changes is the bright-line test extension, which is doubling from 5 years to 10 years. The bright-line test taxes profits from the sales of residential property if they are sold within
The bright-line test taxes the sales of residential properties which are sold within five years of purchase (or two years of purchase if the purchase occurred between 1st October 2015 and 28th March 2018 under the original bright-line test rules). Here we look at whether the bright-line test applies to the sale of bare land.
Are you confused about the rules regarding deducting low-value assets on rental properties? Let’s take a look at the scenario where rental property owners have made improvements to the property with low-value asset purchases. They have added insulation in the ceiling and installed an extractor fan in the external wall of the bathroom. The government
The new healthy homes standards became law on 1st July 2019. These standards require residential rental properties to meet specified standards across areas including heating, ventilation, insulation and drainage. The deadline for landlords to provide a compliance statement for meeting the healthy homes standards has now been extended from 1st July 2020 to 1st December
Our previous article “Ring-fencing Of Residential Rental Property Losses” explained what these rules are and the circumstances under which they apply. Now we take a look at these residential ring-fencing rules and mixed-use assets. A common mixed-use asset scenario is where a person owns a rental property that is rented out for short-term accommodation as
From time to time there may be a change in circumstances to a rental property that is classed as a “change in use”. For example, a property may be rented out to tenants for part of the financial year, and upon moving out the owner moves in and uses it as their main home. This
A person may elect to apply the residential property loss ring-fencing rules either on a portfolio basis or on a property-by-property basis. Here we discuss and explain how the ring-fencing rules apply under each method. Portfolio Basis Unless a taxpayer elects otherwise, the loss ring-fencing rules will apply on a portfolio basis. This means that
The new ring-fencing rules of rental loss apply retrospectively from 1 April 2019 for the 2019/2020 and later income years. Inland Revenue issued an official paper entitled “Ring-fencing rental losses” in March 2018 outlining the proposal to ring-fence tax deductions on residential rental properties so that they could not be used to reduce tax on
Renting out your home, rental property or holiday home for a short-term period can be a great way to make some extra income when you’re not personally using those properties but don’t want to lock in long-term renters. Airbnb, Bookabach and other online accommodation companies make it extremely easy to list your property as they
If you own a rental property or are looking to invest in one, it’s worth understanding the different rental property expenses you may be able to claim to help lower your tax burden. Rental Property Expenses Which Are Tax Deductible Legal fees incurred during the process of purchasing the property. Accounting fees for the ongoing
