Last week, the New Zealand Government announced a housing package that includes changing the tax treatment of interest on loans for residential property, in a bid to deliver a more sustainable housing market.

From 1 October 2021, interest deductions on residential investment property acquired on or after 27 March 2021 will not be allowed. Interest on loans for properties acquired before 27 March 2021 can still be claimed as an expense, but the amount one can claim will be reduced over the next 4 income years until it is completely phased out.

From the 2025–26 income year, property owners will not be able to claim any interest expense as deductions against their property income.

Further information available here.

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