RBNZ delays asset class changes until December 2014
If you have five or more investment properties in your portfolio, you will want to take note of a new asset class set to be rolled out in New Zealand later this year.
According to the New Zealand Property Investors Federation, the Reserve Bank of New Zealand (RBNZ) had initially planned to roll out the new changes – which introduce a new asset class for certain residential properties – on June 30, but decided to delay their introduction until December 2014.
Under the new classification system for investment property in New Zealand, rental property owners with five or more properties will now be considered small to medium sized enterprises or income-producing real estate.
However, a number of submissions were made about the proposed five-plus property rules – including six by banks asking for greater clarification about how this new asset class would be managed, as well as the terminology used in the proposed changes.
Banks also pointed out that they will need more time to address the technical changes that are associated with the creation of a new asset class.
Submissions asked the RBNZ to specify whether all five investment properties had to be located in New Zealand, and raised the issue of how investors involved in part-ownership structures should be treated.
As a result, the RBNZ has announced it will delay the creation of the new asset class until later this year so it can address some of the issues raised in the submissions.
Asset classes are just one of many things to think about about when you make an investment, which is why it's so important to seek property investment advice from a trusted professional. Asking the right questions can help you get the information you need to make the most out of your time and your money.
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Expert