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Property Council Requests Tax Assistance To Support Canterbury's Recovery

Contributor:
Fuseworks Media
Fuseworks Media

Property Council is joining others in requesting the Government's assistance to support recovery efforts in Canterbury.

In a letter to the Ministers of Finance and Revenue, Hon Bill English and Hon Peter Dunne, Property Council has requested the Government allows property owners to claim a tax deduction for losses on buildings.

Property Council chief executive Connal Townsend said many property owners had buildings that were significantly damaged in the September 2010 earthquakes and many buildings will need to be demolished.

"Current tax law prohibits property owners from claiming this tax deduction however we believe there was a precedent set after the Bay of Plenty floods in 2004, when the then Labour government granted a waiver.

"This effectively allowed a tax deduction to be claimed for the difference between the insurance proceeds and the tax book value of the building prior to the adverse event."

Property Council also endorses a proposal by KPMG that clarifies that costs incurred in demolishing buildings that are structurally unsafe or uneconomic to repair are deductable for tax purposes.

"New Zealand's tax system should compensate where New Zealanders suffer real economic losses," Mr Townsend said. "It's important that every step is taken to ensure Canterbury residents and businesses are able to recover from the tragedy that has occurred in recent weeks."

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