Tax incentives stop capital flight from Garden City
New tax incentives will encourage Christchurch commercial property owners to reinvest in the area.
New tax incentives will encourage Christchurch commercial property owners to reinvest in the area.
Property professionals such as Hamish Doig of Colliers International believe the incentives may help prevent capital flight.
Some property owners had been threatening to quit Christchurch and take their insurance money elsewhere.
But property law specialist Paul Calder of Duncan Cotterill, said new tax legislation will mean that landlords whose insured buildings have to be demolished can choose to rollover any net depreciation recovered from affected buildings into replacement buildings.
The replacement buildings must be in greater Christchurch and must be acquired and available to rent by the end of the owner’s 2015/16 tax year.
The Canterbury Earthquake Recovery Authority legislation defines greater Christchurch as the districts of the Christchurch City Council, the Selwyn District Council, and the Waimakariri District Council.
Mr Calder said this would discourage building owners putting their insurance proceeds to work in Auckland in the meantime because it would come at a tax cost, giving them less to reinvest.
He said tax issues would have a real impact on property related decisions.
Chris Hutching
Tue, 13 Sep 2011
Tue, 13 Sep 2011
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Tax incentives stop capital flight from Garden City
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