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Take advantage of New Tax Depreciation Rates

Business should take advantage of New IRD Tax Depreciation rates

Inland Revenue has published new tax depreciation rates on their website which apply to all types of assets used for business in New Zealand. The rates take effect on 1 April 2005 for all non-building assets and 19 May 2005 for buildings.

“Excluding building structures, rates have increased by up to 34% which is potentially advantageous to business,” says DTZ Valuer Tony Pratt. “Building structures have generally decreased by 1% so we would strongly encourage all property owners to undertake a depreciation analysis of any building structures, fit out and chattels”.

DTZ say they have been talking to IRD to clarify some aspects of the new rates on behalf of their clients. These new rates appear to have been published on 28 April 2006 following recently passed legislation.

Previous rates were based on the estimated useful life of an asset taking account of the residual value which is normally at 13.5%. The new regime appears to have moved away from that method of calculation and has greatly accelerated the majority of depreciation rates.

To discuss the implications of the new rates for your property and assets please contact Tony Pratt on (04) 460 3820 or Peter Todd (09) 374 6619 for further information.


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