​Recent changes to the Taxation Act 2017 mean that owners of closely held companies (five or less shareholders) now have the option to apportion expenditure on motor vehicles that are provided to shareholder employees between business and personal by using actual records, a percentage based on a logbook or in accordance with the IRD’s mileage rates. This avoids the need to pay FBT on these vehicles.
 
This election may only be made when the vehicle is first acquired or first used for business purposes from the start of the 2017/2018 tax year or later. This apportionment rule only applies to shareholder employee vehicles, therefore FBT will still apply to motor vehicles which are used by employees who are not shareholders. 

The government has announced extending the bright-line test on residential property from two to five years. This change will come into effect once the Bill receives the Royal assent expected to be sometime in March 2018. Residential properties purchased before the new Bill is enacted will still be subject to the two year bright-line test.

The effect of the change is that gains from the disposal of residential land acquired and disposed of within five years will be taxable, subject to some exceptions.

The bright-line test only applies to residential land. This includes land that has a dwelling on it, land where the owner has an arrangement to build a dwelling on it, and bare land that could have a dwelling erected on it under the relevant district plan. It does not include commercial premises or farmland.

​There are exclusions to the bright-line test for a person’s main home, relationship property in certain circumstances and inheritances. A person may only have one main home and a person may not use the exclusion if they are deemed to habitually sell their main home.

The purpose of these changes is to ensure speculators pay tax on gains from property speculation as well as improve affordability for owner-occupiers by reducing demand from speculators.