National approach to tax reform needed

Press Release – Property Council Of New Zealand

A national approach to tax reform is needed to assist building owners with sesimic strengthening, Property Council argues in response to a report prepared for the Canterbury Earthquakes Royal Commission.
MEDIA RELEASE
14/10/2011

National approach to tax reform needed

A national approach to tax reform is needed to assist building owners with sesimic strengthening, Property Council argues in response to a report prepared for the Canterbury Earthquakes Royal Commission.

The report, a technical paper co-authored by Associate Professor Jason Ingham and Professor Michael Griffith, ‘The Performance of Unreinforced Masonry Buildings in the 2010/2011 Canterbury Earthquake Swarm’, proposes a single national policy for unreinforced masonry building maintenance and seismic strengthening.

It acknowledges the cost to upgrade about 3,867 unreinforced masonry buildings around the country is about $2 billion – significantly greater than the estimated $1.5 billion value of the total stock.

Property Council chief executive Connal Townsend said while the report acknowledged the need for ‘cost-effective strategy,’ it did not propose a solution.

“A national approach to tax policy, as opposed to Canterbury-specific tax policy, would help. In particular, the Government should allow earthquake strengthening costs to be deducted.

“At the moment, these costs need to be capitalised, effectively meaning no deduction because depreciation is now disallowed.

“Making these costs deductable would help property owners comply with the requirements of an increasing number of councils for buildings to the earthquake strengthened, while improving public safety.”

Property Council believes the Government should change its tax policy to allow an immediate deduction for all or part of the cost of rebuilding; allow a special depreciation deduction for repaired/new buildings; and to bring back depreciation for commercial building structures.

In a submission to the report, Property Council also argues the current review of the Building Code should be widened to include a review of section 112 (Alterations to Existing Buildings) and section 115 (Compliance Code Requirements: change of use) of the Building Act 2004.

Under those sections of the Act, buildings should be strengthened when the building is upgraded or a change of use occurs.

“The transition to upgrading New Zealand’s building stock is going to take time, and this should be acknowledged in a widely-consulted review that includes sections of the Act,” Mr Townsend said.

END.

Content Sourced from scoop.co.nz
Original url