Land Tax

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Residential Property Tax

Whoever is occupying the property receives bills sent out at each financial year. You get to pay land tax if you are an owner of the house, and if you are a renter it is billed in your rent which is obvious. If you occupy the property for a portion of the year, you have to pay a portion of the tax. Usually, the annual bill sent out to a standard family home ranges between $1000 – $2000. It is also not rare for inhabitants to claim against their valuation to acquire a tax reduction.

The property taxes in Auckland are used to fund local services, including subsidies to public transport companies, lighting, maintenance and cleaning streets. This also includes the waste collection (except for some areas where an extra charge is levied), recycling collection and water for the locals; however, the water utility is charged separately in some cities like Auckland.

Even though Auckland residents have been protesting for the last few years against the water rates and charges. Although they recently got the water charges eliminated from their rates, they still weren’t decreased! Subsequently, Auckland’s inhabitants are paying roughly the same as before with the extra water charges (many households pay above $800 per year)

Residential Tax NZ

Pros and Cons of Residential Tax

The main advantage property owners have is that the government hasn’t set a fixed tax rate for all residential property owners. The property tax varies from one locality to another, and people have the right to claim against it and get their rates lowered.

Another pro about the land taxes in New Zealand is that the city services such as waste collection and street cleaning are funded through the land taxes collected from the people.

One disadvantage of the localities’ residential tax is that they vary from one locality to another. And in some cities, the land tax is quite high as compared to other regions. Get your land tax issues sorted with ORB360’s chartered accountants.

Residential Tax Experts

Suppose you want to invest in property and make most of your investment in Auckland. In that case, you might have got some burning questions inside your mind regarding capital gains tax, tax structure, renting, cash flow, transferring property, renovations, minimizing taxes, and many more. This is when residential tax experts come to the rescue. They are specialists in land tax realms and help investors by giving taxation advice over residential investment properties. With their help, you can better protect assets, offset losses while minimizing taxes.

Residential tax experts hold extensive knowledge and expertise in accounting and financial management. Advice and recommendations from professional tax experts are highly suggested as their taxation strategies are legal and help you minimize tax liabilities on properties in a legal manner. Residential tax experts Auckland help clients understand the tax environment, tax implications, and specifics of your property.

Capital Gains Tax has been refused by the government; however, a tax on unoccupied land is considered. The main purpose is to discourage land bankers while improving the housing crisis. The economist Kirdan Lees stated that implementing a vacant land tax would be complicated, and therefore, Deputy Prime minister Grant Robertson should not go forward with this idea.

According to Finance Minister, putting a tax on unoccupied land would improve housing affordability and, therefore, wanted the Productivity Commission’s advice on this matter. The draft report that the productivity commission provided last week stated that deciding will take a little more time. But putting a tax on vacant land isn’t a straightforward strategy. There are more acceptable alternatives, and the tax policy should be a little easier to understand, and collecting revenues should be effortless.

Also, differentiating land banking from standard business activities is problematic. Finding vacant land which isn’t already outlined for urban development is uncommon. Usually, vacant lands are used for low-value activities such as deer farms and car parking areas. These lands provide benefits as well as accumulate capital gains. Without clear markers for land banking, it leaves much room for “we reckon”, resulting in clouding tax collection.

Most landowners own land indirectly through different companies. Additionally, taxing vacant land plots is expected to increase the marginal value activities, which could be masked when the vacant land is not being completely used for housing development.

It’s essential as inland revenue will require important resources to examine who owns what and where. When inland revenue is assigned to enforcing and deciding the new rules, it will destroy all the significant resources. Whereas these resources can be used somewhere else. For instance, existing policies can be better monitored, like the bright-line test of residential property sales.