Spurred on by the tax changes for rental properties, investors are now turning to new builds.
Whether it’s buying off the plan, a house-and-land package or a freshly completed property, Kiwi investors are making the most of the advantages that come with a new build.
There are several attractive aspects to a new build, including:
- Lower deposit – because they’re exempt from LVR rules, lenders typically only ask for a 20% deposit from investors instead of 40%
- 20-year bright line exemption – no tax payable on the profits of sale on a new build for two decades
- Lower maintenance costs – no need to budget for a roof replacement or repaint for many years
- Attract excellent tenants – new builds are always desirable places to rent
- 100% tax deductibility on interest payments – for up to 20 years
“The demand for new build townhouses and standalone properties is definitely there,” economist Tony Alexander told Stuff. “My view is that a switch will happen, but it’s a switch, not an overall sell-off of all residential property. That means many investors will not be exiting the market, they will be changing their focus to new builds.”
Talk to our sales team if you’re interested in seeing what new builds are available.