Family Tax Credit Raised and FBT Lowered
November 25, 2009 New Zealand Taxation
Changes were announced on November 24th to both the New Zealand minimum family tax credit and fringe benefit tax (FBT) on low-interest employment related loans.
According to a statement by Peter Dunne, New Zealand Revenue Minister, low-income families who are eligible for minimum family tax credits, will see a small rise in their received amount on April 1st 2010. Explaining the change, Peter Dunne said “The minimum family tax credit provides a guaranteed minimum family income to families who are in work. It currently guarantees recipients a net income of $20,540 a year. This will rise to $20,800 from 1 April 2010”. The tax credit aims at making sure that eligible families are at a net gain from entering the workforce. As at March 2009, over 2,700 families were entitled to receive the minimum family tax credit.
Peter Dunne also announced that the rate used to calculate the FBT on low-interest employment related loans has been reduced from 6.41% to 6.00%, and will take effect retroactively from October 1st. The move follows a review, comparing the rate to the Reserve Bank’s survey of variable first mortgage housing rates.
Both changes were approved by Order of the Council, on November 23rd.