Cost of providing a rental property will rise from $5,500 per year to $9,000 if the current governments tax reforms go ahead. While some of these will be passed on to tenants will it be practical or even possible to pass the total increase?
The governments proposed “loss ring-fencing” rules would mean people with residential properties would no longer be able to offset tax losses from those properties against their other income. While the aim is to level the playing field between home-owners and property investors this will eventually drive a lot of rental providers out of the market.
Investment in property has always been a safe bet for kiwis however with changing regulations and low margins this might not be suitable for some.
Considering buying a rental property? Contact us today and we can advise you if it will provide the returns you seek.
* Figures based on New Zealand Property Investors’ Federation study into the cost of providing the average NZ home as a rental https://www.stuff.co.nz/business/money/102724845/property-tax-plan-promises-huge-rise-in-cost-of-providing-rentals-landlords-say
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