The government tax changes will soon impact every single property investor in New Zealand. 

The most talked about and controversial change is the removal of mortgage interest tax deductibility for property investors. 

For properties bought before 27th March 2021, interest deductions are to be phased out.

Simply put, once FULLY implemented (further 3 years from now),

  • You have $1,000,000 in rental mortgage say with an average interest rate of 5%
  • You will not be able to claim the $50,000 interest as a tax deductible expense.
  • Assume tax rate is 33%
  • You will be paying $16,500 more in taxes per year for this property compared to now.

For further details on this subject and how it impacts on you individually, it is important to do a review with your financial advisors: accountant, mortgage broker and wealth planner. 

It is also crucial now to review the performance of your property portfolio and perhaps make some decisions. 

It is worth noting that at the time of this article, you will be able to enjoy full mortgage interest deduction on New builds. 

Replacing an existing investment property with a new build should be explored as one of the options to prepare for these changes.

If there are multiple properties within your portfolio, shifting mortgage from properties where interest is not a tax-deductible expense to new builds should be considered. 

With every crisis there is opportunity. Market sentiment has been rather negative lately, with both sales volume and prices on a downward trend, there are many great buying opportunities right now. Taking advantage of these opportunities and rebalancing your portfolio based on your individual financial situation and desired outcome, it can fast track wealth building to a whole new level.


This is not accounting or financial advice. Please consult your tax and financial advisor to review and evaluate your individual situation. 

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