'$500m at stake' for sector

The Property Council is worried about tax changes concerning buildings and says landlords could lose $500 million if the regime is altered.

Connal Townsend, chief executive, said members were concerned about IRD's review of what is depreciable.

This could wipe out tax deductions claimed on almost anything attached to a building and integral to its function, including air conditioning systems, lifts, escalators and partitions.

"Often, it is not only the building owner/developer who claims depreciation on the wear and tear of fit-out items, but the lease-holder, depending on the lease agreement. Businesses will therefore also suffer a significant cost if depreciation on fit-out is disallowed," Townsend said.

The council was working with IRD officials on site visits to Wellington office blocks "to better understand how items are allocated between fit-out and building structure and we will be seeking further engagement with policymakers".

"Initial estimates of the figure at stake for the listed property sector are around $500 million.

"As other countries move to a greener more energy efficient built environment, New Zealand seriously risks inadvertently fostering old, carbon intensive stock. About 17 per cent of New Zealand's total emissions come from the built environment making it a considerable contributor to our emissions profile," Townsend said.