As we all rug up tight against these wintry temperatures, the government has announced some new changes to make sure tenants across the country aren't shivering in their rentals. New changes to tenancy laws will mean all residential investment properties for rent will need proper insulation – but the much-discussed 'warrant of fitness' for rentals homes is out the window.
Minister for Building and House Nick Smith said these changes would create healthier homes for hundreds of thousands of families across the country. Landlords will need to retrofit underfloor and ceiling insulation for social housing, and from July 1 2019 for all other rental properties. There are a few exceptions to the new regulations, such as where underfloor space is limited or inaccessible ceilings.
"This package is a more pragmatic and efficient way of improving housing standards than a housing warrant of fitness scheme," Mr Smith said.
Whereas the WOF policy would have cost the government some $100 million a year, Mr Smith pointed out that these changes can be made without the price being passed on to tenants. Issues like dampness, mould and unsafe wiring are already covered by existing legislation, which means the government can put more effort into insulation and smoke alarms – both of which are an enormous part of tenant wellbeing.
In fact, the smoke alarms are expected to save three lives a year.
"These reforms will require 180,000 homes to be insulated and the 120,000 homes currently without smoke alarms to have them installed," Mr Smith stated.
There are some important things to keep in mind. If your property doesn't have any insulation whatsoever, installing new material won't be be tax deductible – this is because it's considered a capital expense, which isn't accepted by the IRD.
On the other hand, these changes could encourage you to improve your existing insulation, which you might be able to claim as necessary maintenance. It can be a grey area, so it's worth getting advice from your property manager or accountant to make sure you're not claiming costs you shouldn't be.
Here's to your financial independence!
Daniel Carney
Authorised Financial Adviser / Investment Property Expert
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