From Newsgroup: nz.general
On Tue, 15 Jul 2025 12:43:07 +1200, Crash <
nogood@dontbother.invalid>
wrote:
This gives the lie to allegations National has given landlords a 'tax
break' by allowing them to claim interest costs as a business expense.
https://tinyurl.com/32994n2p
This is a clear indicator that the result comes from increased supply
if not also falling demand.
The value of the landlord tax break has nothing to do with reductions
in rent - for a large majority of landlords their borrowing has not
changed, and whatever interest they pay is still tax deductible.
Rents have gone down by a small amount, but it does not affect most
landlords unless they are having to fill a vacancy, and even there the reduction in rent is not very much. Interest rates have not changed
for most borrowing, so the value of the tax break has barely changed.
See:
https://www.ird.govt.nz/property/renting-out-residential-property/residential-rental-income-and-paying-tax-on-it/rental-expense-deductions
and
https://www.ird.govt.nz/property/renting-out-residential-property/residential-rental-income-and-paying-tax-on-it/property-interest-rules
If anything, the value of the ability to deduct interest paid from
taxable income has _maximised_ since 31 March 2025.
Note also that some rents will actually go up as a result of recent
flooding, but again that will not change the deduction. With large
numbers of New Zealanders having moved to Australia, some have kept
their house in New Zealand, and that is probably why some rents have
reduced - there are still a lot of homeless and people in overcrowding situations but the tax deduction for interest payments still applies.
Selling houses may also result in lower tax than previously - to pay
tax on capital gains included in a sale then you have or are involved
in a business that has a pattern of buying and selling - you can look
up the rules with the IRD - and that is more generous under the
current government, and those policies are also not affected by the
change in rental income.
Have I missed anything, Crash?
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