Tax relief good news for Chch commercial property Owners

13 September 2011

Tax relief good news for Christchurch commercial property owners

Tax relief for commercial property owners opting to reinvest in greater Christchurch is a welcome fillip for the rebuild, according to property law specialist Paul Calder, of Duncan Cotterill.

Under the new legislation, landlords whose insured buildings have to be demolished can choose to rollover any net depreciation recovered from affected buildings into replacement buildings – as long as they are in greater Christchurch.

Calder said the replacement buildings must be acquired and available to rent by the end of the owner’s 2015/16 tax year.

The CERA legislation defines ‘greater Christchurch’ as the districts of the Christchurch City Council, the Selwyn District Council, and the Waimakariri District Council.

“So if Christchurch building owners were thinking of putting their insurance proceeds to work in Auckland in the meantime, it will come at a tax cost, giving them less to reinvest,” Calder said.

“Tax is going to have a real impact on property related decisions and, I think this relief package is certainly a significant move in the right direction.”

Hamish Doig, managing director of Colliers International in Christchurch, believed the move would help arrest the potential flight of capital from the city.

“The reality is that there have been inner city property owners who have been saying that they are going to take their insurance proceeds and invest some of them in other centres.”

ENDS

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