12 Aug 2010

Tax rule changes welcomed by property company

12:30 pm on 12 August 2010

Kiwi Income Property Trust, the largest listed property company in New Zealand, has welcomed proposed changes to tax rules which will allow commercial fitouts to be depreciated.

Tax changes announced in the 2010 Budget in May effectively stop property companies and business owners claiming depreciation allowances for buildings.

But the IRD and Treasury on Wednesday issued a discussion paper suggesting depreciation will not be allowed for the structural parts of a building, such as the foundations, frames, external walls and roof, but it may be for non-structural items like carpets and air conditioning.

Kiwi Income Property Trust chief executive Chris Gudgeon says May's tax changes will reduce after-tax profits across the listed property sector by about 5%.