Tax changes to encourage build-to-rent long term rentals.
The Government is proposing a tax change to encourage more build-to-rent long term dwellings in order to assist with the New Zealand housing crisis. This tax change will exempt landlords from the interest limitations rules and applies to new and existing build-to-rent developments. This exemption will apply from the 1st of October 2021, and the legislation is due to be included in the August 2022 tax Bill.
The definition of this build-to-rent class includes…
- Landlords must offer the lease for at least 10 years. However the tenant is allowed to request a shorter term, and is able to terminate the lease with a notice of 56 days.
- There must be at least 20 dwellings that comprise a single development.
- The whole development must be owned by a single owner
- Explicit personalisation policies must be offered, over and above the Residential Tenancies Act 1986
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