Here are a couple of tax changes effect from 1 April 2025 for New Zealand businesses and individuals. These adjustments, will impact how you manage your finances, report income, and plan for the future.
Personal Tax Thresholds & Rates
The government has announced new personal income tax thresholds, effective from 1 April 2025. Here’s a breakdown of the updated rates:
| For each dollar of income | Tax rate |
| 0 – $15,600 | 10.5% |
|---|---|
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| $180,001 and over | 39% |
These changes aim to provide tax relief to lower and middle-income earners. If your income falls within these brackets, you may notice a reduction in your tax liability.
Property Tax Changes
Significant changes are underway in the property sector:
- Interest Deductibility: Interest on loans for residential rental properties, which had been phased out, will be fully deductible from the 2025–26 income year.
- Bright-Line Test: The bright-line period for residential property has been reduced from 10 years to 2 years for properties acquired on or after 1 July 2024. This means that if you sell a property within two years of purchase, you may be subject to tax on any capital gains.
Questions? Call Cornish Accounting today.