Housing package announcement

The Government has announced a set of measures designed to meet problems in the housing market.

Assistance for first home buyers
From 1 April 2021, First Home Grant income caps lifted from $130,000 to $150,000 per couple, as well as higher house price caps (Napier and Hastings – up from $525,000 to $600,000)

Tax changes to discourage investors

• Bright-line test doubled from 5 to 10 years: gains on investment properties purchased after 27 March will be subject to income tax if sold within 10 years. Exception for newly-built homes (remains at 5 years)
• Main home exemption rules tightened to exclude periods longer than 12 months when the property is not the main home
• Interest deductibility on rental properties purchased after 27 March 2021 will cease to be deductible from 1 October 2021. 4 year phase out for interest payment deductibility on properties purchased before 27 March 2021

Investment to boost supply

• $3.8bn spending for infrastructure (roads, pipes etc.) on vacant land to accelerate housing supply
• Government will allow Kāinga Ora, the Crown housing agency, to borrow up to $2bn to buy land for housing
• The Apprenticeship Boost scheme is to be extended

These changes will affect many of our clients, and if you have questions, we would encourage you to contact us to discuss the finer detail. Please see the details of our team, or simply call us on 06 835 8939 or send an email to law@langleytwigg.co.nz .