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Consultation On Exemption Of New Builds From Proposed Tax Rules


The Government has today confirmed new builds will be exempt from planned changes to the tax treatment of residential investment property.

Public consultation is now open on details of the proposals, which stop interest deductions being claimed for residential investment properties other than new builds.

“The Government’s goal is to encourage more sustainable house prices, by dampening investor demand for existing housing stock to improve affordability for first-home buyers. The proposals we are releasing today will help to achieve that goal,” Grant Robertson said.

“This is part of the Government’s move to cool the property market. A more sustainable housing market supports more first-home buyers to get into their own home but also protects our recovering economy. So we all benefit.”

David Parker said: “The proposal to exempt property development and new builds should help boost supply by channelling investment towards increasing housing stock and away from direct competition with first home buyers and owner-occupiers for existing housing stock.”

“This consultation is focused on finalising the detailed design of the rules. The proposals will not affect the main home.”

Generally, it is proposed that residential property would be considered a new build if it is a self-contained dwelling (with its own kitchen and bathroom, and that has received a code compliance certificate). The Government is also considering whether subsequent owners should also be exempt from the interest changes, and for how long any exemption might last.

Consultation closes on 12 July 2021. The measures will be introduced into Parliament later this year but will apply from 1 October 2021.

The discussion document Design of the interest limitation rule and additional bright-line rules will be available at and accompanying summary sheets at

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