Who’d be a property investor in 2019?

A capital gains tax might be off the table but there are still several changes happening that make it less appealing. Properties will soon have to be brought up to higher standards of insulation, ventilation and heating. Losses on rental properties are now ring-fenced, so they cannot be used to offset other income. The bright-line test, applying income tax to capital gains, has been extended to properties bought and sold within five years.

With the prospect of capital gains slimmer for the time being in many major centres, it might make you ask whether it’s a sector worth dabbling in, at all.

But many New Zealanders still cling to property investment as the best way to “get ahead” and prepare for retirement.

Last year, 313,596 taxpayers – excluding companies – filed returns that declared rental income for residential, industrial and commercial property investments.

Property investment is more tangible than shares. The fact you can borrow from the bank to get started also amplified potential gains (although it would also magnify losses).

Rental returns are getting better: Corelogic data shows since the start of 2018, rents have risen at almost double the rate of house prices across the country.

If you’ve been thinking you’d like to get stuck in to property investment, click on the ‘Read the full sourced article’ link below to see how you might do it:

Read the full sourced article

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