30 July 2021

Following on from March 23 property tax changes in New Zealand, the IRD has recently released their consultation documentation on how the design of the interest deductibility limitation rule might apply and some proposed changes to the bright-line rules.

The podcast is hosted by Tax Advisory Partners, Daniel Gibbons and Ryan Watt. The topics covered:

Interest Deductibility

• An overview of how the limitation on interest deductibility is proposed to apply

• Outline who would be subject to the limitation, including what kind of properties and entities

• How the “developer” and “new build” exemption would apply

• Calculation considerations for what interest would be affected

• How interposed entities would be treated

Bright-line Test

• How the bright-line test would apply to “new builds”

• How the main home exemption would apply to new builds

• Outline how the roll-over exemption for certain related party transfers might apply if implemented