Landlords Planning Rent Increases
May 25, 2010 New Zealand Taxation
A recently released survey indicates that New Zealand landlords are planning to raise residential property rental rates, as a result of tax changes introduced in the 2010 national Budget.
On May 25th the New Zealand Business Council for Sustainable Development released the results of their post-Budget announcement survey. Among other findings, the results revealed that 47 percent of surveyed landlords intend to raise rents to compensate for any loss of profit from new taxation changes. Only 13 percent of landlords were undecided on the rates of rent they will charge. Among all survey respondents 69 percent of non-landlords believed that average rents would increase, and 65 percent of landlords expected to see an overall rise in rent.
In the 2010 New Zealand Budget, released on May 20th, fiscal changes were announced closing tax imbalances in the taxation of rental properties. Among other changes, depreciation deductions will no longer be granted on housing with an expected life exceeding 50 years.
Nearly half of landlords within the survey claimed that denying depreciation will directly cause them financial problems. Conversely, only 26 percent of New Zealanders believe that the changes will have such an impact on their well being. Of the surveyed landlords who intend to increase rents, 47 percent attributed the change primarily to the depreciation allowances alterations.
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