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Property investment decisions shrouded in uncertainty

9 February 2010

MEDIA RELEASE

Statement made by Paul Dunne, Senior Tax Partner, KPMG

The silence on depreciation today in the Prime Minster's speech on tax indicates that this remains very much a focus for the Government in its tax reforms.

Property investors will be looking for clarity around parameters and definitions.

Until detailed announcements are made, property investments decisions will be shrouded in uncertainty.

We expect a lot of pressure will be applied by the property sector on the Government between now and the Budget in order to gain further clarity.

A positive aspect of today's announcement is the indication that the Government is looking at a package of tax reforms.

A range of options are available to Government to address the perceived "problem" with the total amount of tax paid by the property sector. Although ruling out land tax and RFRM, Government's silence indicates removing building depreciation remains on the table.

Property investors need to ask - if depreciation is denied, then what level of tax rate cut would compensate?

For more information, or for an interview, please contact Sneha Paul on 021 243 8997

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