New Zealand drops sledge hammer on property investors

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On 23 March, the New Zealand Ardern Government announced major property tax reforms targeted at investors, specifically:

  • extending the term of the Bright Line Test for taxing capital gains on investment property from five years to 10 years; and
  • fully removing the tax deductibility of mortgage interest payments on residential investment properties.

Yesterday, the Ardern Government announced the finer details of the changes. In particular, landlords will no longer be able to claim mortgage interest as a tax deductible expense on existing properties, but will be able to claim the interest deduction if the property is a new build.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.