Northland Property Investors' Association
In June 2019, the Coalition Government passed new rules regarding ring-fencing of residential property rental losses. This means that any losses made from the rental properties cannot be offset against personal income - for example the owners’ salaries, wages or business incomes.
“Delaying this law until the 2021/22 year would help the 300,000 rental property owners who are expected to cushion their tenants financially without Government assistance during this Covid 19 lockdown” says Sharon Cullwick, Executive Officer of the NZ Property Investors’ Federation (NZPIF).
Cullwick said it was very disappointing that the new temporary loss carry-back scheme introduced last week has specifically excluded residential rental property owners from using this scheme. This allows the offsetting of past years’ profits with this year’s losses and the ability to receive refunds of the tax paid in the previous profitable year. This type of help is desperately needed by private residential rental property owners as well.
The Government has introduced some minor changes to help residential landlords. However, these are overshadowed by the huge burden placed on landlords to financially help out their tenants at this time. Many landlords and tenants are working together to find a manageable solution for both parties. But for those landlords whose tenants have, without any consultation with their landlords, decided not to pay any rent, the elimination of the right of a landlord to terminate a tenancy unless the tenant’s rent is 60 days overdue makes the current situation very difficult for the landlord.
Most landlords only own one or two rental properties, excluding their own family home, and provide an essential service of making a home available for others. Therefore, they face exactly the same challenges as tenants with job losses, business failures and difficult financial times.
The delaying of the ring-fencing losses for the 300,000 rental property owners will give them more flexibility to assist many of the 1,300,000 tenants in rental houses.
The New Zealand Property Investors’ Federation represents 7000 property owners and is responsible for educating and supporting landlords to ensure New Zealanders have access to high quality rental properties.
For further information please contact
NZPIF Executive Officer