EPSOMTAX.COM
  • HOME
  • ABOUT
    • IN THE NEWS >
      • OWNERSHIP STRUCTURES
      • TURNING SKILLS INTO MONEY AND A BETTER LIFESTYLE
    • PARTNERS
    • SERVICES
    • TESTIMONIALS
    • WHY USE A PROPERTY ACCOUNTANT
  • FAQ
    • AML/CFT
    • ANTI-CORRUPTION
    • AUDIT SHIELD
    • DATA PRIVACY
    • FORMS
    • GETTING STARTED IN INVESTMENT PROPERTY
    • HOW TO CALCULATE RENTAL YIELD
    • INFO FOR NEW INVESTORS
    • INVOICES
    • NEW VS OLD VS LAND&BUILD
    • TAX RETURN FAQ
    • TAX POOLING
  • CONTACT
  • BLOG

WE'RE BLOGGING TODAY

TAX WORKING GROUP INTERIM REPORT - IMPACT ON PROPERTY INVESTORS

9/21/2018

0 Comments

 
The Tax Working Group (TWG) has published its interim report. What will be the impact on property investors? Please see the PDF below for an executive summary, courtesy of Forsyth Barr.
equity_strategy_2018-09-21_twg_looks_to_stretch_taxable_“income”.pdf
File Size: 357 kb
File Type: pdf
Download File

THE GIST OF IT

Basically, the TWG wants to extend taxes on capital gains to things other than property. But, they are also looking at reintroducing building depreciation, so it is not all bad for property investors.  

TAX ON CAPITAL INCOME
A capital gains tax (CGT) regime for property and share traders/developers etc already exists in New Zealand, so this is nothing new. The TWG recommendation is to extend this to catch gains on assets that are not already taxed:
  • Land and property (other than the family home)
  • Intangible property, including goodwill
  • All other assets held by a business or for income producing purposes that are not already taxed on sale (such as plant and equipment)
  • Shares in companies and other equity interests
The Final Report arrives in February 2019.
​​

IMPACT ON INVESTORS

Some key points:
  • Sir Michael Cullen has indicated that any new CGT would not be retrospective, so this is a huge relief for existing investors. 
  • Losses arising from the sale of an asset would be carried forward, and subject to ring-fencing e.g. you sell a rental property, and make a loss: this loss can only be used against another rental property.
  • No changes to company tax rates or GST.
  • Won't be introduced until 2021/22
For more information, please contact either Guy Johnson or Paul O'Driscoll or via the details below.
Picture
Picture

Content posted by kind permission of Forsyth Barr. This does not represent endorsement of EpsomTax.com Limited or its related companies by Forsyth Barr. All rights and trademarks belong to their owners
0 Comments

WHAT DOES TAX-DEDUCTIBLE MEAN?

9/20/2018

0 Comments

 
Picture
We are sometimes asked: what does "tax-deductible" really mean? Does it mean that I get all my money back?  Well...

No.

When an item is ​tax deductible that means that the cost is able to be deducted from taxable income or the amount of tax to be paid.

All purchases are either 100% tax-deductible, partially tax-deductible or not tax-deductible. A 100% tax deductible item does not mean you get 100% of the money spent back. It means that you can claim 100% of the cost against your taxable income. A 50% tax deductible item e.g. phone, means you can claim half the cost against your income.

So, let's say that you want to put new carpets in your rental property. The cost comes to $4000. This would be 100% tax-deductible. You can claim all of that cost against the rental income the property is earning.

But let's then say that you are at the supermarket, and you forgot your personal credit card. So you pay for your groceries from your rental property account.  This would not be tax-deductible.

HOW MUCH TAX WILL I GET BACK?

So, how much do you get back when you buy a tax-deductible item?  Well, it depends on how much tax you pay. The maximum tax rate is 33%. So the maximum tax refund is also 33% i.e. You will never get back more tax than you actually paid. So we suggest as a rule of thumb: divide the cost by 1/3. This gives you a rough idea of how much tax you might get back. 

​Of course, tax refunds are subject to things like: were you correctly taxed at your job? Are the property losses ring-fenced so that you get little or no personal tax refund? Is your rental property owned by an LTC, partnership or sole trader that allows losses to be passed to the owners (under current laws) or is it owned by something like a trust or standard company, which don't?

QUESTIONS

If you have further questions, please place a comment here or contact us.
0 Comments

    Garreth Collard

    Accounting for your rental residential investment property; specialised property tax advice.  Buy me a coffee! 

    View my profile on LinkedIn

    Archives

    January 2023
    August 2022
    July 2022
    June 2022
    May 2022
    February 2022
    December 2021
    November 2021
    October 2021
    June 2021
    May 2021
    April 2021
    October 2020
    September 2020
    June 2020
    April 2020
    March 2020
    September 2019
    February 2019
    December 2018
    September 2018
    June 2018
    April 2018
    January 2018
    December 2017
    November 2017
    October 2017
    August 2017
    July 2017
    June 2017
    May 2017
    March 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    April 2016
    March 2016
    January 2016
    December 2015
    November 2015
    October 2015
    July 2015
    June 2015
    March 2015
    February 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

    Categories

    All
    Accounting
    Airbnb
    Companies
    Compliance
    How To
    Investment Property
    Ltc
    Overseas
    Tax Planning
    Trusts
    Video

    RSS Feed

email  Ph +64 9-973-0706  NZ Toll-free 0800-890-132  Fax +64 28-255-08279
Complaints   Privacy Policy & Disclaimer   Unsubscribe   Refunds   English   español
Information provided on this website is not intended to provide an exhaustive or comprehensive statement of tax law, nor is necessarily accurate and therefore should not be used as a substitute for considered written advice. All information published is subject to our disclaimer, terms and conditions, code of ethics and data privacy policy. All prices quoted are in NZD and exclude GST unless otherwise stated. Please note that fixed price fees do not include the cost of responding to an IRD Audit or Risk Review; please see FAQ for more info.

​© Copyright EpsomTax.com Limited 2013-2017. All rights reserved. EpsomTax.com is a registered trademark of EpsomTax.com Limited. All other registered trademarks or trademarks referred to on this website are the property of their respective owners. Use of this website is governed by the laws of New Zealand.
eWAY Payment Gateway
  • HOME
  • ABOUT
    • IN THE NEWS >
      • OWNERSHIP STRUCTURES
      • TURNING SKILLS INTO MONEY AND A BETTER LIFESTYLE
    • PARTNERS
    • SERVICES
    • TESTIMONIALS
    • WHY USE A PROPERTY ACCOUNTANT
  • FAQ
    • AML/CFT
    • ANTI-CORRUPTION
    • AUDIT SHIELD
    • DATA PRIVACY
    • FORMS
    • GETTING STARTED IN INVESTMENT PROPERTY
    • HOW TO CALCULATE RENTAL YIELD
    • INFO FOR NEW INVESTORS
    • INVOICES
    • NEW VS OLD VS LAND&BUILD
    • TAX RETURN FAQ
    • TAX POOLING
  • CONTACT
  • BLOG