31 март 2023 г. - Taxation Act - passed

Описание:

Creates Build-To-Rent as asset class

Parliament enacted the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Act 2023 (Tax Amendment Act) on 31 March 2023, establishing build-to-rent (BTR) as a specific and recognised asset class in the New Zealand real estate market.

What is BTR?
BTR assets are typically large residential developments that comprise a number of dwellings to be held long-term for rental investment rather than for sale on completion. The developments are professionally managed and usually owned by a single institutional investor. BTR assets offer tenants the security of long-term leases (generally with tenant favourable break rights) and often include additional shared amenities (eg, co-working facilities, gymnasiums, event venues).

The BTR sector is significant in many overseas jurisdictions and a number of developers and investors have increasingly been looking to invest in this space in New Zealand. There have however been a number of domestic policy settings, particularly from a tax perspective, which affect the feasibility of BTR developments. The Tax Amendment Act addresses one of these key policy issues but, as outlined below, a number of further important issues remain in the BTR context.

Having regard to the current housing crisis across the country, both with respect to supply and affordability, research undertaken by Property Council New Zealand indicates that New Zealand could deliver over 25,000 BTR homes in the next decade if the right policy settings are adopted.

Interest deductibility
The Tax Amendment Act provides that "build-to-rent land" is exempted from the interest limitation rules for residential properties under the Income Tax Act 2007 (ITA) in perpetuity. BTR has been added to the list of "exempted residential land" in Schedule 15 of the ITA. This exemption allows investors to deduct (from their taxable income) interest on loans relating to BTR assets for as long as that interest has a sufficient nexus with the income derived from those assets. The exemption is retrospective from the date the interest limitation rules took effect on 1 October 2021.

Source: https://www.russellmcveagh.com/insights/april-2023/build-to-rent-an-emerging-asset-class-in-new-zealand

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