More tax tips, traps and troubles 19 Feb 2018

Attention landlords

At present you must hold a residential property (that isn’t your main home) for at least two years to avoid paying income tax on any capital gain. Labour has firmly stated they intend to increase this period to five years and because it’s just tweaking existing legislation it will be sooner rather than later. The good news is they are not planning on making the legislation retrospective so it will only apply to properties purchased after the law is changed  The Government also plans to abolish the tax benefits of negative gearing but has provided no specifics yet. One scenario is to only allow rental property losses to be offset against rental property profits. We also don't know yet whether the law change will apply to residential rentals only, or whether it will include commercial property.


New ideas

The new Government has introduced Best Start, a $60 a week payment for a year following paid parental leave. If your household income is less than $79,000, the payment will continue until the child is three years old. It has also enacted a “winter energy” payment of $450 a year spread over five months for people receiving superannuation or a main benefit. These payments will not be means tested. Couples will get $700 between them to spend how they wish.


Backdated holiday pay

If you back pay an employee or ex-employee for holiday pay, tax this as a lump sum.

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