Reforms to the tax treatment of rental properties
in New Zealand are making landlords less enthusiastic about completing further investments. Since the changes were implemented, landlords can no longer claim depreciation on their buildings or use loss-attributing qualifying companies to balance their income with rental losses.
As such, the New Zealand Property Investors Federation has called upon the government in the country to reverse the changes, noting that the loss of depreciation will have a noticeable impact on the Buy to Let
market, Stuff.co.nz reported.
Andrew King, the federation's vice-president, cited research carried out by the organisation which found that eight per cent of owners were considering selling up. In addition, 31 per cent of investors said that they would no longer be increasing their portfolios as a result of the tax changes.
"The problem I see at the moment is that the new people aren't really coming in ... if rental prices go up, as we expect they will, then those new people will start to be attracted in again. But at the moment, they're not," he told the news provider.
Mr King added that he expected the change to be especially noticeable in Auckland, where higher-priced properties have the most depreciation to lose.
- Wednesday 06 April 2011