tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, April 16th, 11:54AM

Mortgages

rss
Latest Headlines

Is a bright-line test extension imminent?

Speculation is mounting that the government will extend the bright-line test beyond five years, capturing a greater number of investment properties for taxation.

Wednesday, December 2nd 2020, 9:02AM 1 Comment

While Prime Minister Jacinda Ardern has ruled out a traditional capital gains tax on investment properties during her time in charge, the Labour Government is exploring ways to take the heat out of the investment market following a record year. 

There's a growing belief that Finance Minister Grant Robertson will ask the Treasury about an extension to the bright-line test.

Robertson has confirmed he asked Treasury to review the effectiveness of the current model.

The bright-line test currently requires people who sell investment properties within five years of buying them to pay income tax on capital gains. The bright-line was introduced by National at two years, and extended by the coalition in 2018 to five years.

Tax advisers say the IRD is likely to up the ante in its enforcement of the bright-line tests. They also note there are provisions in existing legislation for greater taxation of any property sales made within ten years, under section 14B of the Income Tax Act. 

The scrutiny on the bright-line test comes after recent IRD figures showed a lack of compliance and enforcement.

Recent Inland Revenue figures found that a quarter of investors subject to the bright-line test did not pay the tax that applied. Of the 1,701 property sales it applied to in 2019, just 1,285 owners paid the necessary tax, according to the figures.

An extension of the bright-line test is supported by the Green Party and opposed by National, which has called it a capital gains tax by stealth. 

The debate points to greater scrutiny on landlords' activities as house prices continue to rise across the country.

Tags: Bright-line test Grant Robertson house prices property investment tax

« Time to stop the finger-pointing on housingBNZ warned over responsible lending failings »

Special Offers

Comments from our readers

On 7 December 2020 at 10:56 am Peter L said:
So a two year limit did not work, so they tried five years.
A five year limit did not work, so they are thinking of extending that.

When will they realise that it does not work - period?

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.29 2.59 2.65
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 2.29 2.59 2.65
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 2.89 3.19 3.39
BNZ - TotalMoney 4.55 - - -
Lender Flt 1yr 2yr 3yr
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.40 3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - 2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.79 ▲2.99 ▲3.29
SBS Bank Special - 2.29 ▲2.49 ▲2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
The Co-operative Bank - Standard 4.40 2.79 3.09 3.29
TSB Bank 5.34 3.09 3.29 3.45
TSB Special 4.54 2.29 2.49 2.65
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 2.29 2.69 2.79
Median 4.55 2.73 2.99 2.80

Last updated: 12 April 2021 8:56am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com