During the budget there were some new tax announcements made, the key announcement that impacts almost all Kiwis is the change in personal income tax rates. This change comes into effect from 31 July.
The changes to the thresholds are as follows:
Personal Income Tax Rates:
- Income up to $15,600: 10.5%
- Income from $15,601 to $53,500: 17.5%
- Income from $53,501 to $78,100: 30%
- Income from $78,101 to $180,000: 33%
- Income above $180,000: 39%
There were also some other updates made that you may have missed, they are as follows:
- Trust Tax Rate: The trust tax rate will increase from 33% to 39% starting April 1, 2024
- Interest Deductibility on Residential Rental Properties: Interest deductibility will be phased back in, with 80% deductible from April 1, 2024, and 100% from April 1, 2025
- Bright-line Test: The Bright-line test period for residential property sales will be reduced from ten years to two years starting July 1, 2024
- Commercial Building Depreciation: Depreciation on non-residential buildings will be removed again from April 1, 2024
These changes are part of broader fiscal adjustments aimed at promoting economic recovery and addressing housing market dynamics. If you have any specific concerns or need further assistance in understanding how these changes might affect your financial planning, consulting a tax professional or financial advisor would be beneficial.