Changes to Tax Rules for Property & Sick leave, KiwiSaver Contributions and Upcoming Westpac Awards

JUNE 2021 UPDATES & NEWSLETTER

RESIDENTIAL INVESTOR TAX RULE CHANGES
The Government recently confirmed a few more details for the changes to tax rules for property. The news confirms that anyone who has purchased a residential investment property before 27 March 2021 will see interest deductibility be phased out between October 2021 and March 2025, and if the house was purchased after 27 March 2021 the deductibility will stop from October 2021.
The main change is that property development and new builds are exempt from the interest deductibility and consultation is now open on finalising the detailed design of these rules, such as how long the exemption should apply for.
New builds will also be subject to a five year Brightline test, rather than the expanded ten year test. This means you would have to pay tax on the sale of a property (other than your family home) if it was sold before this timeframe.
This is all part of the Governments plan to cool the property market and we should have some more detail around this for you over the next month.
Watch that you don’t fall into the trap of buying new properties just for interest deductibility. We recommend you ring or come and see us before making these sorts of decisions as capital gain is also crucial.
Also remember interest on commercial property is still 100% deductible.

SICK LEAVE BILL PASSED
The Holidays Amendment Bill to increase Sick leave to 10 days per year has now been passed by the Government and will come into effect from 24 July 2021.
This means employees will receive a minimum of ten sick days when they reach their next entitlement date, either when they have reached 6 months of employment or on their next sick leave entitlement anniversary.
You can read more about this here.
We all agree that this will have a huge impact for a lot of businesses, so we encourage business owners to provide feedback on this issue through Canterbury Employers Chamber of Commerce. They will then channel this through to the Government. You can do so here.

RECENT BEREAVEMENT LEAVE CHANGES
Under recent law changes, employees now have the right to take a minimum of 3 days bereavement leave in the unfortunate event of miscarriage or stillbirth.
You can read more about this here.

MAKE SURE YOU GET YOUR GOVERNMENT KIWISAVER CONTRIBUTION
Just a reminder that if you are wanting the full Government contributions to your KiwiSaver ($521.43), you’ll need to have contributed a total of $1042.86 between 1 July 2020 to 30 June 2021. This doesn’t include employer contributions, government contributions, interest and any transactions under the Trans-Tasman retirement savings portability.
If you haven’t heard of this, the government are helping us save by contributing 50 cents for every dollar we put into our KiwiSaver up to a maximum of $521.43.
You can check how much you have contributed to your KiwiSaver to date by contacting your KiwiSaver provider. It’s also a great chance to check with them that your Prescribed Investor Rate (PIR) is correct.
If you won’t reach the $1042.86 from your employee contributions this year, you can make a voluntary contribution to top this up. See more about how you can make this contribution payment here.
Please note it can take up to 4 days for this transaction to be processed so you will need to make this voluntary payment by the 26th of June at the latest.

WESTPAC CHAMPION BUSINESS AWARDS
It’s that time of year again – The Westpac Champion Business Awards, and we know many of our clients are up to amazing things in their businesses. Why not look at the different categories and put your name down this year?
These awards are also a great way to get your business name out there!
To view the award categories click here.
To enter click here.
Entries are open from 14 June to 23 July 2021.
Good luck and we hope to see you up on stage!