Buy New, Save More

Building a new house can be a financially savvy decision, when comparing to the option of buying used. The most significant advantages are explained below:

Tax Savings - Investing in property can reduce the amount of tax which is deducted from you normal wages or salary, and building a new home can usually provide for more of those savings compared with purchasing a similarly priced used investment.

Higher Occupancy - Typically new houses are far more attractive to tenants, so occupancy rates will be higher; meaning less money out of your own pocket.

Lower Maintenance Costs - Just like a car; New homes cost less to maintain than used. Yielding homes come with Master Builder warrantees too, so you'll have worry-free motoring for many years.

More about Tax Savings:

Since changes were made to NZ legislation in 2010, property investors can't usually claim depreciation on their properties. It makes sense, because property will typically increase in value, not decrease.

What is less commonly known, is that chattels often can be depreciated each year, which reduces the amount of tax you pay on your entire income.

Common depreciable chattels include:

Driveways & Patios

Curtains & Blinds

Appliances

Aerials

Air Conditioners

Alarms

Carpet & Vinyls

Clotheslines

Fences

Fitted furniture

Heaters

Mailboxes

Garage door motors

Mirrors

Fans

Water Heaters

Building new places a higher value on these chattels, compared to used chattels that come with an older property. This means the scope for savings is larger, which can reduce your ongoing costs significantly.

The following example will show potential advantages of buying new versus old, including high depreciation savings, increased occupancy rates, lower maintenance costs, and lower monthly outgoings.

*Tax offset applied to a personal income