Attention landlords

At present you must hold a residential property (that isn't your main home) for at least two years to avoid paying income tax on any capital gain. Labour has firmly stated they intend to increase this period to five years and also because it's just tweaking legislation already there it will be sooner rather than later.

The good news is they are not planning on making the legislation retrospective, so it will only apply to properties purchased after the law is changed. The Government also plans to abolish the tax benefits of negative gearing but has provided no specifics yet.

One scenario is to only allow rental property losses to be offset against rental property profits. Also, we don't know yet whether the law change will apply to residential rental only, or whether it will include commercial property

New ideas

The new Government has introduced Best Start, a $60 a week payment for a year following paid parental leave. If your household income is less than $79,000, the payment will continue until the child is three years old.

It has also enacted a "winter energy" payment of $450 a year spread over five months for people receiving superannuation or a main benefit. These payments will not be means tested. Couples will get $700 between them to spend how they wish.

Backdated holiday pay

If you back pay an employee or ex-employee for holiday pay, tax this as a lump sum.

IRD seeking more data, quicker

Inland Revenue is aiming to get as much data from you, in electronic format, as it can.

It also wants to get this data much more quickly, so it can make regular adjustments to the tax rates to cater for the Working for Families tax credit etc. More and quicker data would also enable the Government to get rid of secondary tax. Most of these changes will occur on 1 April 2019 or 2020.

You're going to have to file PAYE information electronically if your PAYE and ESCT deductions are $50,000 a year or more. This information will be required within seven working days of making the wage payment.

The department also wants details of interest and dividends reported monthly. It's going to require this information to be filed electronically, unless to do so would cause great hardship.

If you don't supply your IRD number to a payer of interest or dividends, there will be a non-declaration rate of 45% applied to the payment you get.

The banks will no longer be required to send out certificates of annual interest as these will be available on the Inland Revenue website and taxpayers will be able to access them through MyIR.

Disclaimer

This publication has been carefully prepared, but it has been written in general terms only. The publication should not be relied upon to provide specific information without also obtaining appropriate professional advice after detailed examination of your particular situation.