The first month back has been a thoroughly busy one for all our team. What is traditionally a quiet period on the work front followed by a solid build up has turned out to be full on.

For those who can remember, think back to the first term of the Lange government to find a parallel for the level of activity in the building industry and the property market.

New disclosure rules for trusts



The new Trusts Act is now in full effect, which has introduced new requirements for trusts and trustees.

But another piece of legislation passed in December has also introduced new information disclosure requirements for all trusts earning income. In some cases, it may require trustees to provide information going back as far as the 2015 tax year. That information may include financial statements, loans and settlement and distribution details for payments

It is thought that the move may be to discourage people taking advantage of a potential new loophole in tax rates. Personal income above $180,000 is now taxed at 39 percent, whereas the maximum rate for trustees’ income remains 33 percent.

If your trust just holds a family home, bach or non-income-earning assets, this legislation won’t apply. But the new default provisions of the Trusts Act can and will change the way your trust operates—unless you override them.

And you can override them by coming in to see us. As we say in our advertising, “Trust Canterbury Legal with your trust”.

Contact us now to get advice as to how the default provisions will affect your family trust. Or if you’re considering a family trust, then talk to us and we will guide you through the process.
 
If you’re looking to buy residential investment property in the near future, it looks like you’ll need a much bigger deposit if seeking financing from some of the major banks. ASB, ANZ and BNZ have all announced the minimum deposit required will increase from 30% to 40%. The changes will apply to home loan applications and refinancing and top up applications.

ASB chief executive Vittoria Shortt said the change came as the bank was “concerned the continued high levels of investor demand are unsustainable.”

Indeed, residential property prices are increasing fast. The average value of a residential property in Christchurch is now $570,067, up 11.8 percent from the same time last year. This is off the back of last month’s 3.1 percent increase, the strongest rate of monthly growth in 17 years, according to CoreLogic.

Still, conditions are different in different parts of the city. In the north-western suburbs, the average value is considerably higher than the city average, at $787,756.

And if you’re looking for a good rental income stream, different suburbs offer different yields. According to interest.co.nz, yields of 4.7 percent in Riccarton, 5.6 percent in Hornby and 5.7 percent in Woolston feature as the better performers.


New COVID-19 payment support for businesses



Between getting a COVID-19 test and waiting for the results, people are asked to stay at home. It’s a sensible move—but that does put additional pressure on businesses and employees when those employees have to miss work.

To address this, the Government has introduced the Short-Term Absence Payment (STAP). It’s a one-off payment of $350 to help pay employees who must stay at home following a test, and who are unable to work from home. It also applies to employees who need to stay home while they wait for a close contact to get a test result.

Employers can apply for the payment from MSD. Self-employed people are eligible, too.

 

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Well, that’s it from us for February. As always, we’re just an email or phone call away for any questions, help or advice. We look forward to chatting next time.