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Tax incentives for 'build-to-rent' investors

22 August 2022

In a bid to encourage more long-term affordable rentals to be built, the Government introduced another exemption to the interest limitation rules.

The new tax exemption will allow both new and existing build-to-rent developments to claim interest as an expense in perpetuity, provided they meet certain conditions.

These conditions are:

A build-to-rent development should have a single owner and at least 20 homes.

Other dwellings and commercial properties can be included but do not form part of the build-to-rent development.

The fixed-term tenure of at least 10 years should be offered to tenants with the ability to give 56 days' notice of termination.

Although tenants can choose not to take up this offer, shorter tenancy terms can be agreed upon, and the development will still qualify for the exemption.

A personalisation policy that goes beyond what is required by the Residential Tenancies Act to provide more flexibility to tenants.

This is to allow tenants to feel more settled in their home and includes things like allowing tenants to have pets, painting the flat.

Legislation has been passed and applies retrospectively from 1 October 2021.

This change follows already existing exemptions that apply to new builds. Although the new builds exemption applies to anyone who owns the property, it will expire 20 years after a new build receives its CCC. Interest will not be phased out for existing build-to-rent development.

For more information, head to Tenancy Services page

To register build-to-rent land for exclusion from the interest limitation rules, follow this link

The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. does not accept any liability that may arise from the use of this information.

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What the community has to say
  • JJ

    BS! this only benefits the people building. Rents won't change lol

  • JJ

    BS! this only benefits the people building. Rents won't change lol

  • SU

    how does this help existing landlords that have been landlords for more than 10-15 years. does not make any sense.

  • AS

    Unfortunately, these rules do not apply to existing landlords who have properties that were always intended to be rentals but don't suit the criteria specified by the Government :(

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