I wrote about loss ring-fencing in my December article, and it is still a hot topic. With the rules to take effect from 1 April 2019, and the legislation still not finalised, there are a number of questions that remain. I address some of these using case studies, which could well apply to you.  

But first, in case you missed my last blog, the main points from the draft ring-fencing of losses bill are.....

 

On 5 December 2018, the Government released the first draft of legislation dealing with the proposed ring-fencing of tax losses from rental properties. First impression on reading the Bill is that it is extraordinarily complicated and leaves questions unanswered. Here is a quick summary of the key points........

 

There is no doubt the Tax Working Group’s recently released interim report is the topic du jour. Accordingly, it is only appropriate that I offer my two cents’ worth, particularly in relation to the comments on a possible capital gains tax. 
 

• The Tax Working Group (TWG) has ruled out a land tax or an inheritance tax, but appears to me to clearly be pushing towards implementation of CGT. They have noted that it is premature to form a view without firstly determining exactly how the tax may apply, but I would be highly surprised if their final report did not support implementation of CGT.
• The TWG is of the view that CGT should apply across assets broadly, so not restricted solely to real estate. It would also apply to shares, intellectual property, goodwill, business assets etc. The one exception to this will be the family home.  

There are imminent changes to the bright-line test which will affect you if you are planning to buy or restructure investment property. 

You are probably already familiar with the two-year bright-line test that was introduced in October 2015. Under this test, investment property that is sold within two years of settlement is subject to tax on any increase in value. 

The Labour Government has always said they will extend this test to five years. On 15 February it was announced that the new.....

 

Watch Matthew Gilligan and Tony Alexander as they give their post-election analysis. They discuss what is likely to happen in the economy and property market over the next 12 months, factors influencing the market, and how you can invest and profit in the current and unfolding conditions.

 

Labour has targeted investors in its housing policy released. Ringfencing tax losses, five-year bright line rules and a tax committee (to mask their desire to bring in capital gains tax) are all on their agenda......

 

I was recently asked whether there was an upper limit to the ratio between property price and household income, which in Auckland currently sits at about 10 to 1. In other words, the average property price is worth 10 times the average annual income.

Also known as the median multiple, this is an internationally recognised measure of housing affordability and is calculated by dividing house price by.....