Several alterations in the tax landscape could affect you, stemming from both recent budget adjustments and long-anticipated changes. It’s essential to keep up to date with these developments as they can significantly influence your financial situation.
Here is a high-level summary of some of the changes that may impact you:
| What’s changed | How will it impact me? | More info |
| Tax rates – Individuals * | If you earn less than $180k a year, you will pay less tax as the thresholds have been increased. | The changes kick in on 31 July 2024 and composite rates are in place to deal with the fact there are two sets of rates for the 2025 income tax year. |
| Tax rates – Trusts | If you have a trust, trustee income over $10,000 a year will be taxed at 39% from 1 April 2024 (Previously 33%). | This increases aligns trust tax with the top individual rate of tax. |
| Depreciation on commercial buildings has been removed | If you own a commercial property (with a useful life of 50 years or more) no depreciation deduction can be claimed from 1 April 2024. | Commercial properties will still be considered “depreciable property”, they will just have an annual depreciation rate of 0%. |
| Bright Line rules | If you sell a property on or after 1 July 2024, the bright-line property rule will only apply if the property is sold within 2 years of purchasing it. If you sell a property before 1 July 2024 the current bright-line periods still apply. | If you have a property on the market and due to sell before 1 July please get in touch with us to discuss bright line considerations. |
| Independent earner tax credit (IETC) threshold increased | If you earn between $24k and $70k a year as an individual, you may now receive a tax credit of up to $20 per fortnight. The credit was previously only available to those earning up to $48k a year. | If you are on wages, the IETC is claimed through your tax code. More information can be found here. |
| In-work tax credit (IWTC) increased | If you are eligible to receive the IWTC the credit has increased by up to $50 per fortnight. | IWTC is administered by IRD as part of Working for Families |
| Family Boost Introduced | FamilyBoost is a new childcare payment available to families with income below $180k per year to help with the costs of early childhood education (ECE). If you have children aged 5 and under, it may be possible to apply for up to 25% of ECE fees (after the 20 Hours ECE and MSD Childcare Subsidy have been taken into account) up to the $150 maximum fortnightly limit. | The IRD have released some information on eligibility criteria which can be found here. |
* Changes to other tax types required as a due to the individual tax rate changes will take effect from 1 April 2025. These include various pay-as-you-earn (PAYE) thresholds and rates appliable to secondary income and extra pay, Fringe benefit tax (FBT) thresholds for those using the attribution method, employer superannuation contribution tax (ESCT), retirement scheme contribution tax, prescribed investor rates for portfolio investment entities, resident withholding tax (RWT) thresholds.
When we process your financial information we will ensure that all changes are reflected however if you have any specific concerns of questions then please do not hesitate to get in touch.
