The Government has released a package of housing policies aimed at increasing the supply of houses and curbing demand by investors.
Here is a summary of some of the changes:
Bright-line test extended from 5 to 10 years
property acquired on or after March 27
People who buy and sell a property within 10 years will need to pay income tax on any profit made.
The test for new build investment properties will remain at five years.
The family home and inherited property continue to be exempt from the bright-line test.
Property investors will no longer be able to offset their interest expenses against their rental income for tax purposes.
The Government will consult on the detail of the agreed proposal and legislation will be introduced thereafter.
Consultation will look at an exemption for new builds acquired as a residential investment property, and consider whether all people who are taxed on the sale of a property (for example under the bright-line test) should be able to deduct their interest expense at the time of the sale.
The legislation will apply from October 1. However, interest deductions on a residential investment property acquired on or after March 27 will not be allowed from October 1.
23 Mar 2021