KPMG welcomes the findings released today by the IRD and Treasury in relation to the definition of fit-out versus building structure, which concludes that a “building” only includes structural items (e.g. foundations, building frame, external walls, roof, etc). All other, non-structural, items can continue to be depreciated separately.
This distinction is important given the Government’s Budget 2010 announcement that tax depreciation would be denied for buildings from the 2012 income year.
KPMG Head of Property, Ross McKinley says, “KPMG has been at the forefront of discussions with officials on the fit-out review, on behalf of our property clients. It is pleasing that officials have recognised that fit-out for commercial, retail and industrial property does not have a long life, and is periodically replaced due to factors such as obsolescence and changing tenants’ preferences. “
The findings announced today confirm KPMG’s view that there are differences between commercial and residential properties.
Mr McKinley said that the findings will be welcomed by most property investors. For most investors, this represents little change from current practice.
For more information see the Government's media statement and issues paper, http://www.taxpolicy.ird.govt.nz
For further information please contact:
Sneha Paul, KPMG Communications, 09 363 3590 or 021 243 8997
Ross McKinley, Head of Property, KPMG on 021 367594.