Federation supports ring-fencing concerns
Minister of Revenue Peter Dunne has revealed that as well as limiting the percentage of losses that can be claimed on a holiday home in line with the amount of time it is available for rent, if the income from the bach is less than 2% of its value, the Government intends to ring-fence its losses, so that they cannot be offset against any other income.
King supported tax expert Mark Withers’ view that it could be the thin end of the wedge for ring-fencing.
King said: “The rule could easily be extended to the wider property investment community. Imagine the impact to your general property investments, especially as interest rates increase in the future and rental yields weaken relative to land values.”
He said it would be particularly bad for those who offered high-quality rental accommodation that produced a low yield relative to the property’s costs or Government valuation.
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