Industry watch: an unclear definition of new builds complicates implementation of housing rules
This year, the Government has given new homes a policy green light under the new property tax regime. Houses defined as new builds will currently be exempt from the new policy. However, the announcement has sparked widespread responses, with industry figures and mainstream media criticising the regime as too hastily devised and leaving the definition of a new build unresolved. How exactly should a new build be defined? How should the complex new tax rules be followed? These have become leading concerns for the industry.
Last week, 3 months after announcing its new property tax policy, the Government finally released a 143-page consultation document under the leadership of the Minister of Revenue. It primarily covers implementation details under the new tax regime and the definition of new builds:
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Chapters 7 and 8 of the document set out the Government's definition of a new build in greater detail, including:
A new dwelling added on vacant land;
A new dwelling added to land with an existing home, whether on a separate title or a subsidiary title;
A new dwelling or multiple dwellings built to replace an existing home;
An existing home renovated and converted into two or more dwellings;
A dwelling converted from a commercial building.
These five categories will be classified as new builds and will continue to qualify for interest deductibility on residential investment properties and a five-year bright-line test.
The consultation document, running to tens of thousands of words, also shows how intricate and complex the implementation details of the Government's new property tax rules are. To clarify their scope, implementation and how to lawfully avoid tax risks, EMA CBC's Law Year seminar series has chosen 'Latest property tax rules: essentials for investors and developers' as the topic of its fourth seminar. It aims to explain the many uncertainties in the current rules, helping people make better-informed decisions when planning property purchases and investments.
Speakers at this seminar:
- Terry Baucher — Director of Baucher Consulting Limited, with many years of experience at Big Four accounting firms, a specialist in tax law and tax audits, and author of Tax and Fairness
- Raymond Huo — Director of Hesketh Henry and former chair of Parliament's Justice Committee
Time:
Thursday 24 June, 15:00–17:00
Venue:
EMA Business hub，145 Khyber Pass Rd, Grafton, Auckland
Highlights from the previous seminar
The third Law Year seminar, on 'Construction contracts and dispute resolution', was successfully held at EMA last month on 27 May. It attracted many developers and individuals interested in construction contracts and disputes.
The event again featured prominent New Zealand lawyers. Hesketh Henry partners Deanna Clark and Kalev Crossland, director Raymond Huo, formerly chair of Parliament's Justice Committee, and experienced construction disputes barrister Graeme Christie gave engaging explanations of the laws and regulations governing construction contracts.
During the presentations, the experienced lawyers explored the importance of construction contracts from several perspectives and explained how to resolve the difficult issues that arise when contracts are disputed. They provided in-depth explanations of contract forms, risks, obligations and dispute resolution methods.
In the closing question-and-answer session, guests asked questions about their own circumstances. Drawing on their professional experience and legal expertise, the speakers answered each question.
Registration for the fourth seminar is now open. Miss this free opportunity and you will have to wait another year! Scan the code to register now.
