RNZ's money correspondent Susan Edmunds answers your questions. Photo: RNZ
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Does the bright-line test really discourage property speculation or does it simply help people to avoid paying tax?
Anyone who was speculating on property was in theory already caught under the land sale rules - you've always had to pay tax on profits from property that you bought with the intention of selling it.
But the bright-line test makes it really clear that even investment properties that people had bought maybe with the plan to hold on to them for a while can have their gains taxed if they're sold within a short period.
It applies to any non-family home that is bought and sold within a set period of time.
The length of time you have to own a property to avoid having the capital gains automatically taxed has varied over the years but for any property sold on or after July 1, 2024, it is two years.
But if Inland Revenue had reason to believe that someone had bought a property with the intention of selling it for again, even if they held it longer than two years, it could still be taxed.
Deloitte tax partner Robyn Walker said the test was not really designed to reduce speculation.
"The bright-line rule just makes it a slam dunk case where a person can't argue that they weren't buying it with the intention of resale (the only exclusion is for the main home).
"Probably the biggest game changer has been the sharing of information between Inland Revenue and LINZ [Land Information New Zealand] - having IRD getting timely information about property sales allows Inland Revenue to proactively contact people when a property has been sold to remind them what the rules are.
"Inland Revenue have also provided more practical guidance for taxpayers, including this property tax decision tool."
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I am seeking your advice regarding my husband's KiwiSaver contributions.
He is currently employed full-time and taxed at the 39 percent rate. In addition, he undertakes work for me using my individualised funding, which is taxed at 50 percent. Unfortunately, his primary work place is shutting down in two weeks' time.
Given this upcoming change in circumstances, would you recommend that he suspend his KiwiSaver contributions prior to his final payout, until he secures new full-time employment? Our thought process is this may provide one or two more mortgage payments.
I have a significant disability and require a high level of care to ensure my safety. As such, I am presently unable to provide financial support. Your guidance on how best to manage his contributions during this transitional period would be greatly appreciated.
While we can't give personalised financial advice, I asked Kernel founder Dean Anderson for his thoughts on this.
It's hard to know how much extra money cutting the contributions for a short period of time would give you, without information about your husband's salary and contribution rates.
If he has been being taxed 39 percent on his income, he's presumably earning more than $180,000 a year.
If he's contributing 4 percent to KiwiSaver and earning $200,000, that's about $150 a week going to KiwiSaver.
That might be helpful but I'm not sure it will make a huge difference to your overall picture if your husband is likely to be out of work for a period of time.
Anderson recommends also that you check what unpaid leave or other benefits he might be paid when his employment ends.
"Given the tight timeframe, I'd encourage you both to spend the time and energy working through a plan and to come up with a budget. Start getting a financial strategy in place - what income do you need, what are your expenses, what other benefits or support can you get/apply for to assist. If you expect there will be some financial hardship, start a conversation with your KiwiSaver provider so that you can pull together the documentation that you need for any hardship claim in the future," he said.
"In these tough times, emotions can run high. Keep supporting each other, take your time to talk, and slowly chip through a plan one step at a time."
Financial mentors can be a good option if you need some extra support.
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