Kiwi Income takes swipe at tax change

Kiwi Income Property Trust says tax changes in the Government's Budget have reduced the wealth of investors in listed property trusts, many of whom are retirees.

Changes include a reduction in the depreciation rate applicable to buildings to zero from April 1, 2011, and the removal of depreciation loading for assets acquired after May 20, 2010. But from April 1, 2011 the Portfolio Investment Entity tax rate applicable to the trust drops from 30 per cent to 28 per cent.

"It is disappointing to note the Government's decision to effectively target tax increases at investors in property trusts listed on the stock exchange," said Chris Gudgeon, chief executive of the manager of the trust.

The Government had not differentiated between residential rental property investors seeking tax-free capital gains and listed property trust investors who not only supported New Zealand's capital markets but also paid significant tax through the trust on rental income.

- NZPA