Right kids, break’s over. 2018 here we come.
January is usually the time we self-reflect, set goals, and think about how to make impactful changes to our lives. Being an investor and landlord is part
of that life, so why not take some time to recalibrate and consider how to invest more successfully in 2018?
A good starting point has to be getting a lay of the land by getting your head around the kitchen table issues that will inevitably shape the way your
portfolio performs this year. The shifting market combined with the new(ish) government give rise to the very real possibility that you will
have to tweak, if not overhaul, the way you have been conducting your property business. Here are some potential investment stressors we will
be keeping an eye on this year:
On tax and finance:
Bright-line test – It is expected that the BLT will be extended from the current two years to five. The
BLT is a resolute reinforcement of the intention test that sits behind our income tax regime. In a nutshell, it sets a hard a fast time rule for the
IRD to make a prima facie determination as to whether a property is transacted with the intention to profit from its capital gain (and ergo, taxable).
A BLT extension would suggest a more stable rental market with little detrimental effect on long-term buy-and-hold investors albeit making it somewhat
more inflexible for landlords in certain circumstances.
Ringfencing tax losses – The government is taking steps towards reducing the tax deductibility of rental
properties by ensuring that losses cannot be set off against other income. This is...
