Accounting industry groups have hit government plans to limit investors’ mortgage interest deductions, arguing that reforms lead to unintended consequences and unnecessary complexity.
Thursday, July 22, 2021 8:26 AM
Certified accountants in Australia and New Zealand warned in their submissions to the Minister that the law could be overly complex for most kiwis.
“We believe that the ad hoc measures introduced and proposed are inconsistent with the design of good public policy. By curbing home investor demand for existing home stock, the first home buyers are in a” competitive arena. ” Focusing on “leveling” leads to being overly narrow and unintended. result. “
The group said the move would “damage investor confidence” and create “boundary problems and complexity.”
According to the group, tax changes have a disproportionate impact on those who cannot afford to advise on tax planning.
“Many taxpayers who have to apply these rules are not sophisticated taxpayers, and we are very aware that if the rules are overly complex, widespread non-compliance will occur. “
The group said potential legislation in its current form could lead to confusion regarding border issues, disposal and loss of non-deductible interest on housing assets. Also, new builds are set to be exempt from the law, raising concerns about the level of interest concessions for new builds.
Meanwhile, the Australian Association of Certified Accountants agreed that the law would unnecessarily complicate the tax system and said the change would not affect the affordability of homes.
The agency warned that investors and multiple real estate owners would find it particularly difficult to navigate the new system.
The changes will “produce more tax issues, unintended consequences, become overly complex and increase compliance costs, and put a heavy burden on the relevant regulators to crack down on compliance with the new rules. Probably. “
The consultation period for law revision ended on July 12.
The new government measure, which will be introduced to Congress later this year, will come into effect on October 1.
Interest deductions for existing investment properties will be phased out from October 1st this year to March 2025.
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Accountants blame changes in interest deductions
Source link Accountants blame changes in interest deductions