New builds get a 20 year advantage

There’s an extra selling point for new builds, thanks to the Government’s latest announcement of a 20-year tax-deductibility exemption. Could a new build be right for you?

Buying a home, rental or holiday house? It might be time to think about a new build.

The Government recently announced that any new build which received its code compliance certificate after March 27, 2020 will be exempt from its new tax rules which limit deductibility on interest payments against rental income.

That means you can own a new house and continue to get a tax advantage for 20 years by being able to claim tax deductions on mortgage interest payments against your rental income. This will also apply to purpose-built rentals.

Growing New Zealand’s housing supply

Why are these new rules being put in place? The aim is to support more homes being built and help first-time buyers get a foot on the housing ladder.

By making new builds more attractive to investors, their money will be helping to drive higher levels of house construction. This should help developers to sell off-the-plan properties, supporting a boost to our housing supply.

By limiting interest deductibility on existing homes, investors will hopefully buy less existing stock, leaving more available for first-home buyers. Overall, the Government does not want to see the runaway growth in house prices we experienced at the start of 2021.

You can read more about the new build policy here.

Interested in new builds? We can help

If you are interested in investing in rental property or about to buy a house or holiday home, this is a great time to run the numbers on a new build.