By Saurav Wadhwa on Monday, 17 September 2018
Category: Tax updates

Speculation Tax – New Zealand New Tax on Real Estate

Do you own or are looking to own residential real estate in New Zealand? Learn more about new tax on real estate


Speculation Tax – New Zealand New Tax on Real Estate

If you own or looking to own residential real estate, you should know about speculation tax. You should also be aware of the Government tax policy to address New Zealand housing affordability.

Do you have a second home or holiday home in New Zealand?

Starting from the next year negative gearing of rental income which ends into a tax refund is being abolished. The general theory behind this move is to overcome the public perception that rental investment properties are being subsidised by the tax policies. So far comprehensive capital gain tax is off the table, but the 5 years tax rule has been brought in. It means if you buy a residential rental property and sell within 5 years you must pay income tax on the profit.

What we know: Bright line tax

Speculation tax (Bright Line) is effective from 01-04-2018, it applies to all residential investment properties within New Zealand and overseas.

You’re exempt if:

Tax Rate:

What we don’t know yet

IBBZ Accounting is here to help

We can help you assess how these new residential real estate taxes affect you or your company – whether you own a second home, holiday home or investment or development property. Please contact our tax specialist team.

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