The New Zealand Property Investors’ Federation was pleased with IRD Assistant Commissioner Robin Oliver’s view that investment in rental property receives tax advantages. This is a view that has been spread around by various groups over the years and it is good that the IRD has publically corrected this false impression.

Many Investment or financial planners have spread the view of tax benefits for rental property to advance their own desires for favourable tax treatment in order to sell more of their products. Some Property Investment Seminar presenters and property sales people have also given this impression so to help them sell seats to their events and sell property.

At a meeting of the Finance Select Committee yesterday, Mr Oliver confirmed to MP’s that rules about expenses for deducting costs such as interest, upkeep and maintenance, as well as paying tax on income were the same for investments in shares or anything else.

Mr Oliver went further saying that the rules were tougher for housing investment over other types of investment. "In fact under the housing case, the capital gains boundary is brought back a bit. There are tighter rules to what is a capital gain," Mr Oliver said.

Mr Oliver said the concern appeared to be that housing was easier to get and it was easier to get loans from the bank to invest in property.

Andrew King, Vice President of the Property Investors Federation, says that these false impressions have harmed the public impression of property investors in New Zealand.

“Many people have the false impression that rental property owners are somehow ripping off the IRD and not paying their fair share.” Says King. “Clearly this is not the case as rental property owners actually provide a necessary service by housing a large proportion of our population.”

“Many people do not realise that rental property owners provide great value accommodation and this is a key reason why more people are choosing to rent.” Says King.