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Residential Property Interest Limitation Rules

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Residential Property Interest Limitation Rules

From 1 October 2021, interest cannot be claimed for residential property acquired on or after 27 March 2021. For properties acquired before 27 March 2021, the ability to deduct interest is being phased out between 1 October 2021 and 31 March 2025. For more information on IRD property interest rules click here


How interest deductions are being phased for properties acquired before 27 March 2021

Date interest incurredPercentage of the interest that can be claimed
1 April 2020 to 31 March 2021 100%
1 April 2021 to 30 September 2021 100%
1 October 2021 to 31 March 2022 75%
1 April 2022 to 31 March 2023 75%
1 April 2023 to 31 March 2024 50%
1 April 2024 to 31 March 2025 25%
On or after 1 April 2025 0%

**Some properties are excluded from these rules and some exemptions apply


Calculators

Property Interest Calculator-

The Property interest calculator is a great tool to help work out how much interest is deductible, if your property is affected by the interests limitation rule.

Calculator

Interest Apportionment Calculator –

The new-build interest apportionment calculator is a tool to determine how much interest is deductible if your property has both a new build and non-new build and you are required to apportion your interest deduction.

Calculator