As we prepare for the new financial year starting 1 April 2024, we would like to highlight several crucial tax changes that may affect you and your financial planning.

Staying informed about these tax changes is essential for maintaining compliance and making informed decisions about your finances.

Below we share important information and answer some of your questions about the tax changes.

• New Personal Income Tax Rates
• Trust Tax Rate Changes
• Interest Deductibility on Residential Rental Properties
• Amendments to Brightline Rules
• Commercial Building Depreciation

What are the new tax rates for 2024?

New Personal Income Tax Rates:

The Government has introduced new personal income tax rates, effective 1 April 2024. The new tax rates are as follows:

• Income up to $15,600: 10.5%
• Income from $15,601 to $53,500: 17.5%
• Income from $53,501 to $78,100: 30%
• Income from $78,101 to $180,000: 33%
• Income above $180,000: 39%

These new tax rates aim to ensure a fair and progressive tax system while supporting economic recovery and social welfare initiatives. Read our full article: NZ Tax Brackets 2024 for further information.

What is the trust tax rate in NZ 2024?

Trust Tax Rate Changes:

From 1 April 2024, there will be an increase in the trust tax rates from 33% to 39% to align with the top personal tax rate.

What are the changes to interest deductibility in NZ 2024?

Interest Deductibility on Residential Rental Properties:

Commencing 1 April 2024, the Government will begin restoring interest deductibility on residential rental properties. Interest deductibility will be phased in over the next two tax years, with 80% of interest being deductible from 1 April 2024, and 100% from 1 April 2025. This change aims to rebalance the housing market and promote investment in the sector.

What are the Brightline changes for July 2024?

Amendments to Brightline Rules:

The Government announced in its Mini Budget that it would be returning the Brightline test period for residential property sales to a two-year period from 1 July 2024. The details around this are still to be announced. Exceptions apply for the main family home, inherited property, or property sold as part of a relationship property settlement.

Removal of depreciation on commercial buildings from 1 April 2024

Commercial Building Depreciation:

Effective 1 April 2024, owners of non-residential buildings will no longer be able to claim depreciation. Depreciation of non-residential buildings was re-introduced in 2020 as part of a temporary COVID-19 relief for businesses.

In conclusion, these tax changes represent significant developments that may impact your financial affairs.

Should you have any questions or require further clarification on any of these matters, you can check out the IRD website or contact us.