KIWISAVER FIRST HOME GRANT CONTINUED

Eligible KiwiSaver members can withdraw their KiwiSaver funds to purchase their first home, but $1,000 must remain in the KiwiSaver account. The Government Tax Credit is eligible to be withdrawn.

If you are a previous homeowner, please visit the Kainga Ora website for further requirements not outlined below. The buyer must meet the following requirements:

- Have a minimum 5% deposit.

- Have been saving with KiwiSaver (or another complying superannuation fund) for at least 3 years.

- Will live in the house for at least six months.

- Meet income requirements, in the 12 months before you apply, you must have earned:

- $95,000 or less before tax for a single buyer

- $150,000 or less before tax for 2 or more buyers.

Bright-Line Property Rules

The Bright-Line Property Rule means that people who sell a residential property that is not their main home may need to pay income tax on the profit between the purchase price and the sale price.

- If the property is acquired between 29 March 2018 and 26 March 2021 – subject to 5 year Bright-Line test.

- If an existing property is acquired on or after the 27 March 2021 – subject to 10 year Bright-Line test.

- If the property is classified as a new build acquired on or after 27 March 2021 - subject to 5 year Bright-Line test.

The Bright-Line Property Rule has exemptions where it does not apply, including when:

- The property is your family/main home.

- You inherited the property, which was the home of the deceased.

Interest Deductions on Residential Rental Properties

Interest Deductions on Residential Rental Properties are being phased out, except for new residential rental dwellings. No deduction is allowed for property acquired after 27th March 2021. There are exemptions which may apply – these are land business, property development and new build exemptions. For all other residential properties acquired before 27th March 2021, interest deductions are as follows:

- 75% claimable from 1 October 2021 to 31 March 2023

- 50% claimable from 1 April 2023 to 31 March 2024

- 25% claimable from 1 April 2024 to 31 March 2025; and

- No interest deduction claimable from 1 April 2025.

Budget and Recent Government Announcements

2023 Flood Relief

Medium and large-scale adverse event categories have been established to provide relief for farmers affected by recent cyclones Hale & Gabrielle in the North Island. The relief comes mainly in the form of:

- Allowing late deposits under Income Equalisation Scheme for the 2022 income year. To qualify, a farm needs to be “significantly adversely affected”. On the flip side of the late deposit early refunds will be allowed on a “class of case” basis.

- Destroyed Assets and Tax Rollover Relief regarding insurance pay-out for depreciation recovered if replaced within 5 years.

- Temporary Adverse Event Exemption for ETS registered forests (post 1989 forest land will not earn or be liable to surrender any NZ Units (NZUs) until the trees regenerate to pre-event carbon stock levels).

- Government Grants are available for up to $10,000 for pastoral & arable farmers and up to $2,000 per hectare (to a maximum of $40,000) for orchardists. These are GST inclusive.

Covid-19 Concession

Concession provided for Covid-19 for donated trading stock has been extended to 31 March 2024.

It means that a farmer donating baleage and hay to flood affected farmers is not deemed to have disposed of these at market value.

Minimum Wage

Minimum adult wage has increased from $21.20 to $22.70 per hour from 1 April 2023. Minimum wage calculation does not include non-cash benefits but includes any accommodation provided.

The training minimum wage has increased from $16.96 to $18.16 per hour.

Superannuation

Superannuation has increased by approximately $100 for a couple and $70 for individuals per fortnight (after tax). Final figures will depend on living situations and tax rates of individuals.