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Income Tax Act 2007

Deductions - Interest incurred in relation to certain land

DH 4: When this subpart does not apply: exemptions for new builds, development, social or emergency or transitional housing, and council housing

You could also call this:

"When you don't have to follow the rules for interest on land used for new builds, social housing, or council housing"

Illustration for Income Tax Act 2007

You do not have to follow the rules in this subpart in some situations. This subpart does not apply when you incur interest on new build land. It also does not apply if the interest is incurred before a certain date. You are also exempt if you incur interest for a business related to land, as described in section CB 7. This subpart does not apply if you are developing land to create new build land. However, this exemption stops if you own the new build land. This subpart does not apply if you incur interest on land used for social housing, temporary accommodation, or accommodation for people in need. It also does not apply if the land is used for services connected with this type of housing. You can find the definition of social housing in section 2 of the Public and Community Housing Management Act 1992. This subpart also does not apply if a council-controlled organisation or local authority uses the land for housing or services connected with housing. You can find the definition of a council-controlled organisation in section 6 of the Local Government Act 2002. This subpart does not apply to Kāinga Ora–Homes and Communities and its subsidiaries.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS675443.

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Part DDeductions
Interest incurred in relation to certain land

DH 4When this subpart does not apply: exemptions for new builds, development, social or emergency or transitional housing, and council housing

  1. This subpart does not apply to interest incurred by a person to the extent to which it is—

  2. incurred in relation to new build land; and
    1. incurred before the date that is 20 years after the earliest of the following dates for the new build land:
      1. the date on which the code compliance certificate described in section DH 5(7) is issued:
        1. the date that, in the records of a local authority or building consent authority, the relevant conversion or remediation is recorded as having been completed, in the cases provided in section DH 5(7)(d) and (e):
          1. the date that the relevant building work is entered into the records of a local authority or building consent authority as substantially completed, in the case of a code compliance certificate described in section DH 5(7) being issued subject to a building consent waiver or modification under clause B2.3.1 of the Building Code under the Building Act 2004.

          2. This subpart does not apply to interest incurred by a person to the extent to which it is incurred in relation to a business described in section CB 7 (Disposal: land acquired for purposes of business relating to land).

          3. This subpart does not apply to interest incurred by a person (person A) to the extent to which it is incurred in relation to land (the land) that is or was subject to person A’s undertaking or scheme involving development, division, or building for the purpose of creating new build land. However, the exemption in this subsection ceases for person A to the extent to which the land is new build land owned by person A.

          4. This subpart does not apply to interest incurred by a person for land to the extent to which the land is used by an exempt housing provider solely for 1 or more of the following:

          5. social housing, as defined in section 2 of the Public and Community Housing Management Act 1992:
            1. temporary accommodation for people in need while they seek, or are assisted in finding, more permanent accommodation:
              1. accommodation for people in need:
                1. services connected with housing or accommodation described in paragraph (a), (b), or (c).

                  1. This subpart does not apply to interest incurred by a person for land, to the extent to which the land is used by a council-controlled organisation, as defined in section 6 of the Local Government Act 2002, or a local authority, solely for 1 or more of the following:

                  2. housing for people assessed by a local authority as being eligible for accommodation at less than market rental:
                    1. services connected with housing described in paragraph (a).

                      1. This subpart does not apply to Kāinga Ora–Homes and Communities and its wholly-owned subsidiaries.

                      Notes
                      • Section DH 4: inserted (with effect on 27 March 2021), on , by section 75 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                      • Section DH 4(4): replaced (with effect on 27 March 2021), on , by section 45 of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).