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New Zealand law explained for everyone

Income Tax Act 2007

Tax credits and other credits - Terminating provisions

LZ 6: Interest on home vendor mortgages

You could also call this:

“Tax credit for interest from home vendor mortgages”

You can get a tax credit if you receive interest from a home vendor mortgage in a tax year. This applies to you as an individual, but not if you’re someone who doesn’t live in New Zealand, a company, a government organisation, a Maori authority, a group that isn’t a company, or a trustee who has to pay income tax under certain rules about trusts.

To work out your tax credit, you multiply the amount of interest you got from the home vendor mortgage by 0.020. You need to use the full dollar amount of interest, without any cents.

Remember that there’s another rule that can change this one. You can find it in section LZ 7.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518379.

Topics:
Money and consumer rights > Taxes
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LZ 5: Some definitions, or

“Definitions for tax credits have been removed from the Act”

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LZ 7: Maximum amount of credit under section LZ 6, or

“Limit on tax credit for home vendor mortgage lending”

Part L Tax credits and other credits
Terminating provisions

LZ 6Interest on home vendor mortgages

  1. This section applies when, in a tax year, a person derives interest in relation to a home vendor mortgage.

  2. This section does not apply to—

  3. an absentee; or
    1. a company; or
      1. a public authority; or
        1. a Maori authority; or
          1. an unincorporated body; or
            1. a trustee liable for income tax under subpart HC (Trusts) and section HZ 2 (Trusts that may become complying trusts).

              1. The person is entitled to a tax credit equal to an amount calculated using the formula—

                interest × 0.020.

                Where:

                • In the formula, interest means the amount of interest in complete dollars that the person derives in the tax year in relation to a home vendor mortgage.

                • This section is overridden by section LZ 7.

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