A Note from Our Accountant Dammi – May

Menique Stuart

Did you know Inland Revenue has some handy online calculators for property owners. 

1) IR’s Property tax decision tool for buying  / selling property. 

Use this decision tool to help you work out if the property you are buying or selling is taxable under any of the property rules. Click here.

2) IR’s Property net profit or loss calculator

IR also has a handy online tool to work out what the net profit/loss on a property sale would be. Use this calculator if you have sold property and want to check how much income you need to declare on your income tax return, and to find any bright-line losses that must be carried forward.

3) Planning ahead for the new interest deductibility changes:

Some recent recommendations from property accountants: 

  • Think about refinancing if you are short of cashflow, to extract equity and improve working capital 
  • Look into applying for overdraft facilities as it appears that it may get harder to get overdrafts in the future. This will also help your working capital position. 
  • Apply for pre-approvals so that you will be ready to buy the right property. 

    Think about breaking fixed term loans if you are on a high interest rate as the break fees will be deductible until 30 September. The lower interest rates will improve your cashflow.

4) Don’t miss out on your free $521 from the Government for your KiwiSaver

  • This is not directly related to property ownership, however, don’t miss out on the annual Government contribution to KiwiSaver. 
  • The Government pays $521.43 towards your Kiwi Saver if you contribute a minimum of 1042.86 per annum, 1 July to 30 June. The deadline for payment is 30 June but allow enough time for Inland Revenue to process the payment. 
  • This is important for people not in Kiwisaver or for those people who are self-employed and not making regular payments to KiwiSaver.
  • If you have children aged over 18, who are not in KiwiSaver or not earning an income, they are eligible for the contribution as well. 
  • Due to the powers of compounding returns, the $521 will accumulate to a nice amount over years.  

Getting some of the government contribution

Even if you have not saved the full amount, you still get 50 cents for every dollar you put in between 1 July and 30 June.

More information is available here.