As you probably know, the government’s response to runaway house prices earlier this year was to announce sweeping changes to the taxation of investment properties.
This created a predictable stir. Some investors felt they were being demonised for providing rentals. Others wondered whether they should start selling down their properties. My reaction was to take a deep breath and wait to see what the landscape looked like after the dust settled.
Now my advice can be distilled into two words: Don’t panic.
It’s clear the tax changes caught everyone on the hop – including the IRD. There was conflicting advice – your investment properties will be taxed, no wait, if they’re new builds they won’t be…who actually knows? My recommendation is to book a meeting with your accountant. So often they are there to save you from yourself.
And keep this in mind: Governments come and go, rules change, and the world keeps on turning. As my mentor Dr Fred Grosse says, “This too shall pass.” If you have a disciplined plan to invest in property, take the time to coolly analyse your plan in the light of the new rules. Don’t let media narratives blow you off course.
Personally, I have no plans to sell any of my properties right now. Fear-mongering about new taxes is beside the point. You may reach a different decision but that’s your call. Take the actions that suit you, in your stage of life.
And here’s another perspective.
I’m delighted to see that a number of our clients who had been house-hunting for over a year were successful at auctions this month. Perhaps the frenzied bidding at auctions has become a little less frenzied. How nice to see some opportunities opening for people who had been feeling shut out.
Whether you’re looking to buy your first home, next home, holiday home, or build a portfolio of debt-free properties, we’re here to help you get the finance you need, and achieve your goals.
And that’s all that really matters.
We’re always here to help you with loans and to help you get ahead in life.
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