First steps for tax and income relief announced

Finance Minister Nicola Willis today announced time-critical tax and benefit changes together with a commitment to delivering further income tax relief in Budget 2024.

“The coalition Government is progressing a number of commitments to address the growing cost of living, deliver income tax relief and reduce the tax burden. We know Kiwis are doing it tough as inflation and higher average tax-rates erode household incomes. We are determined to bring down inflation and let people keep more of what they earn.

“Today I am announcing our immediate decision to bring the brightline test for residential property back to two years, effective from 1 July 2024. Removing this effective capital gains tax means that properties sold after 1 July 2024 will only be subject to the rule if owned for less than two years.

“I am also confirming the Government’s commitment to fully restoring interest deductibility for rental properties, with details of the phasing of this commitment to be the subject of an announcement in the New Year.

“The Government is progressing work to deliver meaningful income tax reduction in next year’s Budget. This includes considering design and implementation advice for the delivery of our proposed Family Boost childcare tax rebate, and for delivering income relief to workers and their families.

“Work is continuing to uphold the commitment in the ACT-National Coalition Agreement to consider the concepts of ACT’s income tax policy as a pathway to delivering National’s promised tax relief, subject to no earner being worse off than they would have been under National’s plan.

“The advice we have received so far gives the Government confidence that we can responsibly deliver the tax relief New Zealanders deserve.

“In today’s mini-Budget we are also announcing our decision to index main benefits to CPI inflation from 1 April 2024. This change will protect the real incomes of benefit recipients while putting the benefit system on a more sustainable footing.

“This early decision is expected to mean that main benefits will be higher next year than they would have been if we had retained the current index to wage growth.

“New Zealanders enduring a cost-of-living crisis and looking for hope this Christmas should be assured: relief is on its way.”