Assessing seismic ratings for buildings should be tax deductible

Property Council calls for the Government to remove barriers facing building owners for assessing and upgrading their buildings against earthquakes.

Chief Executive Connal Townsend says the anniversary of Christchurch earthquake and recent shakes around New Zealand are a timely reminder of the need to assess and upgrade buildings; but the Government continues to make this difficult for building owners.

“What we’re saying is updating our tax laws to consistently apply across the board. Making assessments tax deductible will align our tax treatment of buildings to almost all other New Zealand business assets.

“It is only fair for such costs to be considered deductible maintenance or operating expenditure for building owners.”

Currently, the IRD is looking to remove the tax deductibility of seismic assessments for buildings.

Property Council has asked the department to ensure it remains tax deductible; instead of putting yet another barrier for building owners who want to ensure the safety of their buildings and the public.

Property owners assess buildings for a variety of reasons, such as demonstrating seismic ratings to potential tenants or for insurance purposes where millions of dollars are at stake.

These reasons and many others to undertake assessments do not result in any capital expenditure, falling clearly within operating or maintenance costs.

“Our current tax rules already create a significant tax disadvantage for commercial, industrial, retail and heritage property owners and worsen affordability issues when there is a need to upgrade. We do not want to make a bad situation even worse.

“Upgrading our tax rules and how they are interpreted so that seismic assessments are tax deductible is a first step to creating a more level playing field in how assets are treated.”

Property Council believes these matters are best resolved by tax policy, calling for a technical working group on the tax treatment of seismic related issues.

“We need a fairer tax system that treats building owners the same as other business owners and ensures we are empowering them in running their day to day operations without being subjected to tax inconsistencies.”

ENDS

© Scoop Media