The Government recently released a consultation document setting out the details of the March announcement relating to the new tax rules for residential property investors.
I have heard optimistic whispers from people that they had read that student accommodation may be exempt. Sorry to rain on that parade but where the documents say that there could be exemptions for student properties they use ‘Halls of Residence’ as an example. This means that there will need to be some sort of commercial element for there to be an exemption.
There is a possibility that boarding houses may be exempt but I wouldn’t bet the house on that.
Last week Andrew Bayly, National’s shadow treasurer issued the following statement:
“It is astounding that Finance Minister Grant Robertson would be so cavalier about breaking the fundamental rule of tax which is: tax profits, not revenue. It is no wonder that property owners feel the rug has been pulled out from under them.”
If the Labour/ Green Government wasn’t so negative in their mind-set towards property investors then they may have considered amending the rules and allowed landlords to deduct the cost of improvements against their income. This would have incentivized landlords to upgrade their properties, providing a positive result for all involved but I guess they would just view that as another loophole for you to exploit.
On a positive note, enquiry for flats has gone to a whole new level. Almost all students that I spoke with a few weeks back had all but accepted that rents around North Dunedin were going up by around $10 a room for next year, as opposed to the usual $5. We had over 100 people turning up to open viewings of flats last month – Here are a couple off photos below showing the crowds. It’s going to be very interesting to see how many students miss out on finding somewhere to live for next year. We’ll get a good indication by the amount of enquiry in late August / early September when the flats are all signed.