Budget 2012 tax announcements
24 May 2012
The Minister of Revenue issued two Budget 2012 media statements relating to proposed changes to rules for: mixed-use assets; livestock valuation elections; tax credits for income under $9,880, the childcare and housekeeper tax credit and the tax credit for the active income of children. A proposal to abolish the student loans voluntary repayment bonus was also announced. An extra allocation of $78.4 million to Inland Revenue over the next four years for tax compliance activities was also announced. For more information, see the Budget 2012 announcements.
The following announcements were made today as part of Budget 2012 proposals.
- Tightening the rules around the deductibility of costs relating to mixed-use assets - those that are both used by their owners and rented out for income, such as holiday homes, boats and aircraft.
- Putting recent changes to livestock valuation rules into law through Budget legislation (with further detail to follow later in the year).
- Repealing two tax credits: the income under $9,880 tax credit and the childcare and housekeeper tax credit.
- Replacing the tax credit for the active income of children with a limited exemption for children.
- Removing the student loan voluntary repayment bonus from 1 April 2013.
- Providing an extra $78.4 million to Inland Revenue over the next four years for tax compliance activities.
- Increasing the student loan repayment rate for all New Zealand-based borrowers earning over the repayment threshold to 12 cents in the dollar from 1 April 2013.
- Broadening the definition of income for student loan repayment purposes to include a wider range of income types from 1 April 2014.
- Implementing an information match between Inland Revenue and the New Zealand Customs Service to identify Student Loan borrowers in serious default.
For more information
- Mixed use assets, livestock valuation election changes and changes to tax credits:
- Tax credits:
Details of the transitional rules and new exemption
- Student loans voluntary repayment bonus:
Summary of the proposed change, fact sheets and Q&A.
- Student loans repayment rate increase:
- Extra funding to Inland Revenue for compliance activities:
For more information on Budget 2012, please see the Treasury website at http://www.treasury.govt.nz/budget/2012.