Property tax change will deter offshore investors, says group

The Government's move to scrap depreciation on listed commercial property is "completely out of whack" with the rest of the OECD and may make it harder to attract offshore investment, the Property Council says.

New Zealand will become one of only a handful of OECD countries without the ability to write-down the value of buildings next year, which commercial property owners says will cut straight to the wealth of their sector.

"The rest of the world provides for it and we are now an outlier, a bit of an oddity and it makes it that much harder for us to attract offshore capital," council national president Chris Gudgeon said.

A New Zealand Institute of Economic Research report commissioned by the Property Council earlier this year shows Slovakia and the UK are the only other countries where depreciation tax breaks cannot be claimed, while in the Netherlands only limited rates can be claimed.

Currently property investors in New Zealand can claim annual depreciation of between 2 and 3 per cent of the purchase price of their building.

To read the full NZ Herald article, click here

Posted: 31 May 2010

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