30-12-1899

Otago PIA President highlights changes

1. News
2. 1999
3. December

It has come to light that in the proposed building code, houses are going to have an energy efficiency rating similar to star ratings on major home appliances. This will take the form of a checklist that the house seller will fill in and give to the buyer on sale. Houses will be rated from 1 to 6 stars based on ceiling insulation, wall and under floor insulation, solar hot water heating, double glazing etc. As part of the EECA subsided insulation scheme, they will issue the property with this rating certificate to give to the new owner when the property is sold.

On the Government front it looks like the Government and the Reserve Bank have given up on using the OCR to control the housing market and are looking at other methods. Don’t be surprised when you go to your local bank to fund your next purchase (especially if you are borrowing 100%), you find things more difficult.

The Government is looking at a raft of tax measures (see website www.ird.govt/resources/file/ebd2d10fc071845/IS0064.pdf )

1. Depreciation Those using the practice of separating out internal walls, doors, electrical wiring, plumbing, kitchen cupboards, vanities and permanently attached furniture and claiming higher depreciation on these than that allowed for building depreciation have been overstating their depreciation claim in the past and this practice will not be allowed to continue. However you can still claim depreciation on carpets, drapes, light fittings, water heaters, clothes lines, white ware etc as they are not part of the building but are separate items.
2. The Gvernment is looking at the future of LAQCs (loss accruing qualifying companies), proposing to ring fence tax losses made by an LACQ so these can’t be used to offset tax on personal income.
3. A general tightening of existing rules on paying tax on profits made when buying or selling property especially within a short timeframe is being considered.

Also the Government has also initiated an inquiry into Housing Affordability and the Residential Tenancy Act amending legislation is to be introduced in the second half of the year. If we get another Labour Government next year, there is a strong possibility we will get some form of capital gains tax.