The first personal income tax cuts since 2010.
A taxpayer earning $78,100, will receive the full impact of the tax changes, which will equate to $1,042.50 per annum, or around $20 less tax per week.
You can access the 2024 budget calculator here to see how much less tax you will be paying from 31 July 2024: https://budget.govt.nz/taxcalculator/index.htm
Independent Earner Tax Credit
From 31 July 2024, the Government has also extended the Independent Earner Tax Credit (IETC) eligibility threshold from $48,000 to $70,000, with the maximum entitlement of $520 per annum being extended from $44,000 to $66,000. So for a taxpayer earning $66,000, with no eligibility to other entitlements will receive $799.50 in tax savings and $520.00 in IETC, so will be better off by $1,319.50 per annum.
Working For Families
From 31 July 2024, the In Work Tax Credit (IWTC) will increase by $50 per fortnight, which abates as family household income increases.
Family Boost
From 1 July, eligible families (families household income less than $180,000), will receive a partial reimbursement of ECE fees paid, up to a maximum fortnightly payment of $150. Reimbursements will be made quarterly as a lump sum, with the first payment to be made in October 2024.
Interest Deductibility for Investment Property
From 1 April 2024 interest deductibility increases to 80%, and from 1 April 2025 interested deductibility will increase back to 100%.
Bright-Line Test Rules
From 1 July 2024, the Bright-Line rules are set at two-years, with any investment property sold after this date that has been owned for two years or more, will sit outside the Bright-Line rules.
Below is a summary of the other key budget announcements:
Health & Education
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$3.44 billion for hospital and specialty
- $2.12 billion for primary care & public health
- $1.77 billion for Pharmac
- $24 million for Gumboot Friday – mental health support for young kiwis
Law & Order
- $1.94 billion for frontline Correction Officers
- $425 million for frontline policing
- $226 for 500 extra police
- $69 million to address youth offending
Infrastructure
- $4.1 billion for Land Transport Fund
- $1 billion + for further cyclone rebuild and recovery initiatives
- $1.2 billion for regional infrastructure – natural disaster resilience, regional growth initiatives, etc.
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$200 million for KiwiRail maintenance and renewal
If you wish to discuss how any of the budget announcements might impact your business or yourself, please contact any of the team at All Accounted For, admin@aafl.nz or 04-970-1182.
