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Harcourts Holmwood supports Gumboot Friday 2024

Supporting Gumboot Friday to provide counselling for young people!

What is Gumboot Friday?

Gumboot Friday helps raise money to provide free counselling services for any young person in New Zealand aged 25 and under. Since 2019, Gumboot Friday has provided more than 100,000 therapy sessions to young Kiwis. The average cost per session is $149.00. An overworked, underfunded, and under resourced public mental health service has led to excruciatingly long wait times for young people needing immediate help. Their free counselling platform provides a bridge for our rangatahi in need, by breaking down the barriers of cost and wait times. By supporting Gumboot Friday, we’re helping make a real difference – supporting them to keep up with the rising demand and ensuring every young Kiwi gets the mental health support they deserve.

Mike King, the founder of ‘I am Hope,’ the organisation behind the Gumboot Friday initiative, shed light on the mental health crisis in New Zealand and the positive impact donations from the Harcourts Foundation will make to the children who access the free counselling service. He said, ‘Gumboot Friday pays directly for the counselling services which helps get these kids struggling with depression and feeling like they are walking in mud, to build a better, brighter future.’

How is Holmwood supporting Gumboot Friday?

We are supporting this incredible cause in three ways:

  1. Holmwood Teddy: On every auction day, held between 19th September and November 20th, Holmwood will auction one adorable teddy and all funds will go to Gumboot Friday.
  2. ‘The Great Gumboot Friday Auction and Quiz Night’: A fun-filled evening with our Holmwood team and “extended family” to raise funds for this incredible cause. There will also be a raffle and auction.
  3. Give a Little: At Holmwood, community means everything to us, we have also started a Give a Little page where you can donate directly by clicking the following link: givealittle.co.nz/fundraiser/together-we-can-make-a-difference

Working together, we can forever change the face of youth mental health!

To learn more how you can support Gumboot Friday:
Visit www.gumbootfriday.org.nz
Follow them on Instagram @gumbootfriday.
Gumboot Friday Facebook https://www.facebook.com/gumbootupNZ

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Spring Gala Auction

The weather is getting warmer and we are heading into a busy selling season in the Christchurch real estate market. Harcourts Holmwood have recently announced another Gala Auction on Thursday 19 September from 4pm at our auction rooms (Ground Floor, 397-399 Ilam Road).

Spring Gala properties:

The Holmwood Gala Auction packages include special marketing offers that are not to be missed.
To learn more about our Gala Auction, please contact our Holmwood sales consultants: Click here

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What to do when ending a tenancy

Before moving:

  • Giving Notice – Generally, tenants need to give at least 28 days’ written notice to end a periodic tenancy. The process is different for a fixed-term tenancy, make sure you know what is required before you start planning your move.
  • Final Inspection – Make sure you understand from your property manager the process for the completion of the final inspection.
  • Connections – Tenants should pay everything they need to and cancel or transfer any services connected to the property (e.g. electricity, gas and internet). Speak to your Harcourts property manager about utility connection service providers who may be able to assist you in a seamless transfer to your new home.
  • Damage – If any accidental damage has occurred to the property during your tenancy, you should speak to your property manager about getting it fixed. You may have the benefit of the landlord’s insurance and you should get the item fixed before you vacate, thus expediting your bond refund.

Moving day:

  • Moving – Tenants must remove all their belongings, but leave behind anything provided by the landlord, such as furniture and appliances.
  • Cleaning – Tenants need to leave the property clean and tidy and take away all their rubbish.
  • Keys – All keys, remotes or access cards must be returned to your property manager.

Bond refunds:

  • To facilitate a quick bond refund, tenants need to ensure that the property is returned in the same condition as it was when they rented the property, with the exception of fair wear and tear. If any repairs or cleaning are required after vacating, this will slow down the release of the bond.

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Property Tax Changes

We are pleased to bring you the latest updates on the recent property tax changes that have been passed into law.

The main tax changes are;

  • Interest deductibility for residential property
  • Returning the bright-line test to two years
  • Removal of depreciation for commercial buildings.

Interest deductibility of residential investment properties is to be phased in

Mortgage interest incurred for residential investment properties will be phased in over the next two years.

  • 80% of interest will be deductible for the 2024-2025 income year• 100% of interest will be deductible for the 2025-2026 income year
  • If the property is a new build, 100% of interest remains deductible.

The status quo will remain for the 2023-2024 income year (100% interest deductible for a new build, 50% for residential rental properties acquired before 27 March 2021 and for (non-new) properties acquired on or after 27 March 2021, no interest is deductible).

Bright-line reduced to two years

The bright-line test, designed to capture tax on gains from sale of certain residential rental properties, has been reduced to two years.

The two year bright-line will apply for properties sold on or after 1 July 2024. In most cases, if a binding contract for sale was entered into on or after 1 July 2024, the two year bright-line will need to be considered.

If the binding contract was entered into before 1 July 2024, the 10 or 5-year bright-line needs to be considered.

There are specific rules that apply to “off plan” purchases, so it is important to seek expert advice on any property transactions.

Main home exclusion

The main home exclusion from the bright-line is being changed from the current calculations based on the time that the property is used as the main home and the land area of such use.

From 1 July 2024 the exclusion will apply in full if more than 50% of the time and more than 50% of the land area of the property has been used as the main home.

Be aware that if the property does not meet the main home exclusion, the gain on the sale may be taxable.

Example:

John entered into a sale and purchase agreement to acquire residential land in late 2021 with the transfer being registered on the title on 5 January 2022. He used the land as a rental property. He enters into a sale and purchase agreement to sell the land on 20 June 2024. The current 10-year bright line test will apply to tax the disposal of the land. The land was acquired after 21 March 2021, and the bright-line end date for the land (being the date the sale and purchase agreement was entered into), was prior to 1 July 2024.

Mike purchased a residential rental property with a bright-line start date of 5 January 2022. He enters into a contract to sell the property on 27 July 2024. Because the bright-line end date for the land is after 1 July 2024, and the property has been held for more than two years, the disposal will not be taxable under the new 2-year bright line test.

Removal of depreciation on commercial building

Depreciation for commercial buildings with an estimated life of 50 years or more, will be set at 0% from 1 April 2024 onwards (application for the 2025 income year)

Commercial fit out that is not part of the building structure can continue to be depreciated separately, so it is important to review this when negotiating agreements

Residential buildings cannot be depreciated for tax purposes.

It will be important to review the impact of the removal of depreciation on future provisional tax payments.

Residential property tax losses

The loss ring-fencing rules still apply for residential property losses.

Residential rental expense deductions can be claimed up to the amount of residential rental income earned in a year, including bright-line income from the sale of a property. However, any excess deductions cannot be offset against other income such as salary or wages. Excess losses are carried forward to be used against residential rental income in the future.

Rollover relief

Rollover relief is a concession that treats the person acquiring the property at the transferor’s cost price and the original acquisition date. Therefore, if the concession applies, bright-line tax may not be triggered nor the brightline acquisition date reset.

Further rollover relief is now available for the transfer of property from 1 July 2024.

In addition to existing rollover relief, bright-line property can be transferred without triggering tax where:

  • The transfer is to an associated person (as defined in the Income Tax Act) and this association has been in place for two years
  • If the transfer is to a trust, all beneficiaries of the trust have been associated with the transferor for two years.

Example

Sarah owns residential land with a bright-line start date of 4 June 2024. The land has a cost of $750,000. In December 2024, Sarah gets advice from her lawyer that it would be beneficial to transfer the land to her family trust. She has been a settlor, trustee and beneficiary of the family trust since it was established in 2020.

As a settlor and beneficiary of the family trust, Sarah is associated with the family trust. Sarah has been associated with the trust for more than two years. Therefore, a transfer of the residential land to the family trust will qualify for rollover relief. Sarah will be treated as having transferred the land to the family trust for its cost ($750,000), such that no tax consequences will arise for her under the bright-line test. The trust will be treated as having acquired the land on 4 June 2024 for $750,000.

On-line Market Operators – GST changes

New listing intermediary GST rules have been implemented for the supply of short-term or visitor accommodation through online marketplace (such as Airbnb) which may affect property managers and landlords that offer short term accommodation. These rules mean GST is charged whether the accommodation host is GST registered or not and changes who accounts for the GST to the Inland Revenue.

These rules are complex, and we suggest if you are affected by these changes (including accommodation hosts considering GST registration) you consult with your accountant or a tax specialist.

In summary, while these property tax changes bring welcome relief, they also introduce complexity that requires careful consideration. We strongly recommend consulting with your accountant or tax specialist to navigate these changes effectively and ensure compliance with tax obligations.

Disclaimer

This information is for general education purposes only. It does not cover all situations and circumstances and should not be taken as direct tax advice. If you are looking for specific help, please contact BVO (Stephen Rutherford or Julia Owens) to provide specific advice.

Harcourts value collaborations with trusted businesses like BVO, to contribute valuable content to Property Management Focus. It’s through these relationships that we can ensure our audience receives the most relevant and impactful insights. Thank you again to BVO for their valuable contribution.

Please visit www.bvo.co.nz for more information.

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Interest deductibility on investment properties

The government restores interest deductibility on investment properties

Updates on tax reform have been announced, with Associate Finance Minister David Seymour announcing that the government will reinstate deductibility for mortgage interest on residential investment properties.

The government will phase in interest deductibility on mortgage interest paid on residential investment properties. Landlords will be able to claim 80% of interest expenses from April 1 2024, moving to 100% from April 2025.

The modification to the interest limitation rule will be included in the Taxation (Annual Rates for 2023/24, Multinational Tax, and Remedial Matters Bill), which is currently undergoing review by a select committee.

The report on this bill is expected by 29 March 2024.

This announcement offers clarity for property investors seeking more precise details on the changes, especially for the 2023/2024 tax year. While some investors might be disappointed that the changes won’t take effect this fiscal year, this is being seen as positive news for property investors as it provides increased certainty and confidence in the market.

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Christchurch House Price Record Smashed

Click here to see the full article from OneRoof here.

‘Broke $9m’: Christchurch house price record smashed for second time in a matter of weeks

Christchurch’s house price record has tumbled for the second time in less than a month, after a large property on the hillside suburb of Scarborough sold off-market for more than $9 million.

Harcourts Holmwood agent Grant Chappell, who brokered the deal, told OneRoof he was unable to disclose much about the sale but he was confident it was a new high for the city’s housing market.

Last week, OneRoof reported industry rumours that prominent Christchurch developer Philip Carter had sold his luxury home on Whitewash Head Road, dubbed The Rocks and also in Scarborough, for more than $8m.

The sale price, which remains private, supposedly pipped the previous $8m record, jointly held by two properties – one of which sold at the start of March.

Chappell was unable to reveal the exact sale price of his Scarborough Hills property before settlement, but confirmed it “broke $9m”.

He said both the buyer and seller were private people who wished to remain anonymous.

However, he was able to reveal some details of deal. He said he had approached the owners of the property after receiving an expression of interest from a buyer.

They told him they would sell if he found them a smaller property in the suburb. “They just wanted to downsize a wee bit to get rid of all their land. They’ve bought a beautiful property close by which is of similar size, but they don’t have the big section to maintain anymore.”

Chappell said the vendors’ house had been rebuilt since the Christchurch earthquakes and was located in the “most magical setting”.

“You don’t look at another house, you don’t see any other roofs, you just look out and you just see the ocean and the beach. It’s a very, very magical site and approximately 2000sqm in size so it’s a big site and it’s got a magnificent garden.”

He said the house had “plenty of bedrooms and bathrooms, high specification features” and a swimming pool.

Chappell wasn’t surprised that Scarborough was home to two of the city’s most expensive homes because the cost of land per metre in the suburb was more expensive than other wealthy suburbs like Fendalton.

“That’s what people don’t realise. It’s so unique up there. It’s a unique part of the town,” he told OneRoof.

“To me, Scarborough is a hidden secret. If all the private schools were in Sumner, a lot more people would live in Scarborough and you’d get even more for the houses because there’s so few of them. It’s the most special part of the world – you go up there and Sumner Beach is in front of you, you can hear the ocean crashing on the beach. It is magnificent.”

Chappell told OneRoof he had also just completed another off-market deal in the $7ms for a 300sqm full-floor apartment with an upmarket fit-out in Upper House on Park Terrace.

He had been working with a couple looking for an apartment in the city so approached the owners, who had told him they were ready to move back to the suburbs and own a lawnmower again.

The above properties were among the five sales in Christchurch that surpassed the $7m mark in March. OneRoof understands the fifth sale to surpass this high threshold was a builder’s own home on Clifford Avenue, in Fendalton.

Chappell said the latest record was a big jump from when he sold two large houses on Fendalton Road, in Fendalton, for just over $2.7m in 2001, which made headlines at the time for being the city’s new record. He did not think it would be too long until Christchurch saw its first $10m sale, adding it would easily happen within the next two years if not before.

“There’s money out there. I look at all the people who have done all these deals and you look at them and we’ve got an ageing population, we’ve got people reaching retirement age and they’ve sold their businesses, they’ve worked hard and all of a sudden there’s a bit of money floating around.” All the buyers he had worked with on these deals were over the age of 60 and from Christchurch.

While Christchurch prices still lag behind Auckland and Queenstown, when it comes to the upper end (the top price in Auckland is just under $40m and the top price in Queenstown is over $40m), they pointed to confidence in the market.

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Just a month-by-month tenancy, thanks!

There is no such thing in the Residential Tenancies Act (RTA) as a month-by-month tenancy, however, we are sometimes asked to give a tenant a months’ notice, so let’s clear this up.

The closest thing to a month-by-month tenancy is a short fixed-term tenancy. However, if a short fixed-term tenancy exceeds 90 days, it is then deemed to be a periodic tenancy, and it was still a ‘fixed-term’. Most of the time residential property managers deal with either periodic, or fixed-term tenancies.

It’s very important to know the differences between a periodic tenancy and a fixed-term tenancy for both landlords and tenants, so that both parties understand their commitments under the RTA and the right type of tenancy is selected.

 

Periodic tenancy

A periodic tenancy agreement has no end date. It continues until either the tenant or the landlord gives written notice to end it. Landlords must use one of the prescribed reasons in the RTA, and the notice period is either a minimum of 63 or 90 days’ notice. A tenant on a periodic tenancy only has to give 28 days’ notice.

 

Fixed-term tenancy

A fixed-term tenancy agreement is for a set period – e.g., 12month term. There is no maximum length for a fixed-term tenancy and the length of the term must be included on the tenancy agreement.

You can’t ‘give notice’ to end a fixed-term tenancy before the end date of the fixed term.

Once a fixed-term ends, the tenancy will automatically become periodic unless the landlord gives notice using one of the prescribed reasons in the RTA. They must give the tenant a minimum of 63 or 90 days’ notice, regardless of the end date for the fixed term. The only proviso is that the notice period must not end before the end of the fixed term, but it can go past the end date.

The tenant must give at least 28 days’ notice to end the tenancy prior to the end of the fixed-term, if they want the tenancy to end on that date, or the tenancy will become periodic. Once a tenant is within 28 days of the end of the fixed term, it is treated as a periodic tenancy, and they are only required to give 28 days’ notice to vacate.

 

Ending a fixed term tenancy early

Generally, a landlord or tenant cannot give notice to end a fixed-term tenancy early. However, there are limited exceptions to this rule, and some other options available if the landlord or tenant wants to end a tenancy early.

Landlords and tenants can agree to end the tenancy early

Fixed-term tenancies can only be changed if the landlord and tenants agree. Any agreement must be in writing and include what’s been agreed to. If a tenant breaks their fixed-term and the landlord has to find another tenant, the landlord may charge a fee for ending the fixed-term early. These fees should only be their actual and reasonable costs. For example, the cost to advertise for new tenants. A tenant may request to assign their tenancy, and the request that must be considered by the landlord.

Withdrawal from a tenancy following family violence – Important

A tenant who experiences family violence during a tenancy can remove themselves from the tenancy by giving the landlord at least 2 days’ written notice in the approved form (with qualifying evidence of family violence) without financial penalty or the need for agreement from the landlord. This applies to both fixed-term and periodic tenancy agreements. Victims of family violence do not need to apply to the Tenancy Tribunal to end their tenancy.

Sadly, property managers are receiving applications for removal from tenancies using this provision in the RTA. Disclosing notice of withdrawal or accompanying qualifying evidence of family violence is an unlawful act, which may result in a penalty paid to the tenant of up to $3000, or a complaint to the Office of the Privacy Commissioner. We are therefore unable to provide the reason for termination to the remaining occupants or tenants. We can however provide the reason for termination to the landlord, but we still need to be careful with what information we disclose, in order to protect the tenants right to privacy.

 

Termination by notice for physical assault by tenant

A landlord can give written notice of at least 14 days in the approved form to terminate a tenancy, if the tenant has physically assaulted the landlord, the owner, a member of the landlord or owner’s family, or the landlord’s agent, and the Police have filed a charge against the tenant in respect of the assault. Landlords will need to provide qualifying evidence of the charge being filed.

Landlords and Tenants can apply to the Tenancy Tribunal

 

Severe hardship – landlord or tenant

If a landlord or tenant has an unexpected change in circumstances, they can apply to the Tenancy Tribunal to end the tenancy, however this can be a high bar to achieve, particularly for a landlord.

If the applicant will suffer from severe hardship if the tenancy continues, the Tribunal may decide to end the fixed-term early at a date the Tribunal determines is appropriate. For this to occur, the hardship of the applicant (if the tenancy continues) would need to be greater than the other person’s (if the tenancy ends early). The landlord and tenant should discuss the change in circumstances first and try to reach an agreement.

The tenant can also apply to the Tribunal to end the fixed-term early if their rent has increased by a large amount. The Tribunal may do this if the increase is an amount that:

  • the tenant couldn’t have expected when they signed the tenancy agreement, and
  • will cause them serious hardship.

 

Changes to body corporate rules

If a rental premises is part of a body corporate and there is a change to body corporate rules that negatively affects the tenant, they can apply to the Tenancy Tribunal to end the fixed-term tenancy early.

 

The Tenancy Tribunal may order compensation

When the Tenancy Tribunal elects to end a fixed-term tenancy early, it may also order compensation to be paid. The person wanting the fixed-term to end may have to pay compensation to cover any costs incurred by the person who didn’t want the tenancy to end.

 

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End of Financial Year Tips for NZ Landlords

End of Financial Year Tips for NZ Landlords

Published on: 20 Feb, 2024

 

As the end of a financial year approaches, landlords have an opportunity to assess their property investments and make strategic changes to optimise returns. Proactively reviewing finances, scrutinising deductible expenses, reviewing and adjusting rent, and assessing insurance cover, can help landlords to maximise return and get the most out of their property investment.

  1. Conduct a comprehensive financial review

Before diving into the new financial year, landlords need to conduct a thorough review of their property’s financial performance. Analysing financial metrics, including rental income, expenses, maintenance costs, and any outstanding debts, can help landlords identify areas for improvement and set realistic goals for the coming year.

  1.  Claim depreciation and rental property expenses

Owning an investment property offers landlords an opportunity to claim certain expenses at tax return time. Deductible expenses relating to the cost of generating rental income, not including costs for private use, can be offset to significantly reduce taxable income and boost overall return on investment.

  1. Review and adjust rent

Market conditions and economic factors influence rental demand and property values, so it’s important for landlords to periodically review and adjust rental rates to reflect current market trends. Conducting a comparative market analysis provides insights into rental rates in the local area and allows landlords to check that their rents remain competitive.

  • Annual rent reviews help landlords keep up with market rents and optimise cash flow to assist with maintenance costs.
  • Adjusting rent appropriately not only maximises rental income but also helps attract and retain quality tenants, ultimately improving the property’s long-term profitability.
  • Evaluate the current rental market in the area and compare against similar properties. Work with a Harcourts property manager who can help determine a realistic rent
  • If justified, consider adjusting the rent to align with current market rates.
  • Be mindful of the Residential Tenancies Act, which governs rent increases and sets out the rules for providing notice to tenants.
  1. Check insurance cover

Insurance is a critical part of property management, ensuring landlords are adequately protected against tenant-related losses. Conducting an annual insurance review helps landlords check that their insurance policies cover essential risks such as property damage, liability, and loss of rental income. Factors such as changes in property value, renovations, or additions could also require adjustments to insurance coverage levels.

  • Review the property insurance policy to ensure it aligns with current needs.
  • Check that the policy adequately covers potential risks, including natural disasters, vandalism, and liability issues.
  • Consult with an insurance adviser to assess coverage and explore any available discounts or improvements.

Getting the most out of property investment is about planning ahead, making well-informed decisions, and working with experts – such as Harcourts property managers and Mortgage Express financial advisers – who can help pave the way for ongoing success in New Zealand’s property market.

Source: mortgage-express.co.nz

 

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Putting Your Rental on the Market for Sale

What you need to know when putting your rental on the market for sale

Published on: 22 Jan, 2024

Source: Harcourts.net

 

Section 47 of the Residential Tenancies Act 1986 (RTA) states that if at any time after entering into a tenancy agreement, the landlord puts the premises on the market for the purposes of sale or other disposition, the landlord must, as soon as practicable, give written notice to the tenant.

Furthermore, when a landlord is offering a property for rent, the landlord shall inform any prospective tenants if the premises are on the market for the purposes of sale or other disposition.

Failure to do so is an unlawful act and may attract exemplary damages of up to $1800 payable to the tenant. In addition to the exemplary damages payable to the tenant, a landlord who fails to inform prospective tenants that the property is on the market commits an infringement offence and is liable to a fine or an infringement fee of $500 to $3000.

If you are planning to put your rental property on the market, speak to your Harcourts property manager first to ensure that your tenants, or prospective tenants are notified as required in the RTA. When selling a rental property, get your property manager involved from the start as they can often negotiate better terms for access with your tenants than a salesperson who doesn’t have an existing relationship with your tenants.

Your Harcourts property manager will also be able to recommend the right salesperson to achieve the best result.

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SuperStart 2024 – MAKE IT HAPPEN

Inspiring Growth and Success at Holmwood’s Annual Development Event

Our team recently had the privilege of attending a transformative event packed with motivation and valuable insights. The day was filled with dynamic keynote speakers and engaging panel discussions, led by some of the most respected figures in the industry. We extend a heartfelt thank you to Jayme Fuller, Phil Harris (Harris Real Estate), Shane Cortese – Real Estate Auctioneer, Renée Walker, and Mark Inglis for their wisdom and inspiring words. Their contributions left a lasting impact, equipping us with fresh perspectives to carry forward in our real estate journey.

This event was a collective success, made possible by the tremendous support from our sponsors: Trade Me, Stuff, and Mortgage Express. Your partnership helps fuel our commitment to excellence and continuous growth.

At Holmwood, the development of our team is at the heart of everything we do. This event reflects our dedication to nurturing talent, and we couldn’t be prouder of what we’ve achieved together. We’re already looking forward to another year of learning, growth, and empowerment. Here’s to continuing the journey of success—together!

If you’re interested in a career in real estate and want to be part of a supportive and dynamic team, contact us today to learn more about opportunities at Holmwood.