Tax Updates: 9 October 2023

Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion on any national or international tax issues, please contact Richard via email at richard@gilshep.co.nz.

Election on the horizon

It’s now less than a week away from this year’s Election Day, although some of you may already have taken up the option to get your votes in earlier and avoid the crowds.

With nothing of interest coming across my desk again in the past week, I thought I would use this week’s edition to summarise the main parties’ election tax policies:

Labour

Personal tax rates & thresholds – no planned changes.

Company tax rate – no planned changes.

Trust tax rate – increases to 39% from April 1^st, 2024.

Property taxes – CGT ruled out & removal of depreciation on non-residential buildings.

GST – 0% on unprocessed fruits & vegies from April 1^st, 2024.

Wealth taxes – ruled out.

National

Personal tax rates & thresholds – No change to rates but amendments to thresholds (also to be inflation-adjusted once every three years):

• 10.5% up to $15,600
• 17.5% on $15,601 to $53,500
• 30% on $53,501 to $78,100
• 33% on $78,101 to $180,000
• 39% on $180,001+

Company tax rate – no planned changes.

Trust tax rate – increases to 39% from April 1^st, 2024.

Property taxes –

• CGT ruled out.
• Removal of depreciation on non-residential buildings.
• Reduce bright-line period to 2 years from 2024 (land acquired pre-July 2022 exempt if sold post-July 2024).
• Bright-line main home exclusion reverts to the previous predominant use test.
• Phased roll-back of interest limitation changes (100% returns from April 2026).
• New foreign buyer tax of 15% on property over $2m.

GST – Reverse the “App Tax” – GST on services sold through digital platforms (e.g. AirBnb).

Wealth taxes – ruled out.

Act

Personal tax rates & thresholds –

New rates and thresholds:

• 17.5% up to $70,000 (from 2023/24 onwards)
• 28% on $70,000+ (phased in – fully applies 2025/26 onwards).

Company tax rate – no planned changes.

Trust tax rate – not stated.

Property taxes –

• CGT ruled out.
• Abolish bright-line test.
• Reinstate interest deductibility immediately.

GST – not stated.

Wealth taxes – ruled out.

Greens

Personal tax rates & thresholds –

New rates and thresholds:

• 0% up to $10,000
• 17% on $10,001 to $50,000
• 30% on $50,001 to $75,000
• 35% on $75,001 to $120,000
• 39% on $120,001 to $180,000
• 45% on $180,001+

Company tax rate – increase to 33%.

Trust tax rate – increases to 39% from April 1^st 2024.

Property taxes – supports a comprehensive CGT.

GST – not stated.

Wealth taxes –

• 2.5% tax on the value of net assets above $4m for couples and $2m for individuals; and,
• 1.5% tax on all assets held in a private trust.

Happy voting!!

This article was originally published through the ‘A Week In Review’ newsletter. If you would like to receive Richard’s tax updates every Monday morning, you can subscribe here.