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Prescription fees, FamilyBoost, home loan tweaks: 1 July changes that could affect your bank account
The start of July brings a raft of changes that will affect households across the country.
From prescription changes to mortgage tweaks, the rules, fees and taxes will affect the way that many people spend and borrow money.
Here are a few of them.
Debt-to-income ratios and loan-to-value restriction tweaks
New debt-to-income rules will limit how much banks can lend to borrowers, compared to their household income.
Only 20 percent of lending can go to owner-occupier buyers with a debt-to-income ratio of six, and only 20 percent of investors loans will be able to be at a debt-to-income ratio of more than seven.
The debt-to-income calculation takes into account other debt, such as student loans.
These rules are not expected to make a big difference initially, because not much lending is currently being done above those levels. However, they are likely to limit the extent of future house price growth.
At the same time, loan-to-value rules will be eased slightly to allow banks to give 20 percent of lending to owner-occupier borrowers with a deposit or equity of less than 20 percent, and 5 percent of lending to investors with a deposit or equity of less than 30 per cent.
Previously, they could only lend 15 percent to owner-occupiers with less than 20 percent deposit and 5 percent of lending to investors with less than 35 percent.
Prescription charges
A $5 charge is coming back on for prescriptions.
This does not apply to people who are over 65, Community Services Card holders, people who are under 14 or people ages 14 to 17 who are dependent on a Community Services Cardholder.
Auckland regional fuel tax abolished
The Auckland Regional Fuel Tax scheme ended on 30 June.
This is worth 11.5c per litre on petrol, diesel and their biovariants.
Families are now able to claim childcare subsidies of up to $75 a week. Photo: 123RF
FamilyBoost introduced
The FamilyBoost policy takes effect from 1 July, offering a payment of 25 percent of early childhood education fees for households up to $75 a week.
This is available in full to households earning up to $140,000 and reduces for those earning up to $170,000.
Households should start saving their invoices from 1 July as either PDF or JPG files, Inland Revenue says.
Payments will be made in three-monthly blocks, starting in October.
Bright-line test reduced
From 1 July, the bright-line test will reduce to two years, from the current 10 years, or five for new builds.
The bright-line test sets a limit on how long properties, apart from someone’s main home, have to be held to avoid tax on capital gains when they are sold.
That means that properties sold on or after Monday now need to have been held for at least two years to avoid the automatic tax.
Chartered Accountants Australia and New Zealand is warning there could be some confusion, though, because the new rules focus on the “disposal” date of a property rather than the acquisition date.
“Care needs to be taken as the dates are determined differently. The bright-line end date is determined by when the seller first enters a contract for sale, whereas the start, or acquisition date is typically determined when title transfers.”
He said that could mean that anyone who had entered negotiations before 1 July could still be captured under the old rule.
Paid parental leave increases
Each year, the maximum amount of paid parental leave available increases.
How much you get is determined by how much you were earning before you went on leave.
From 1 July, the maximum is $754.87 a week before tax, compared to $712.17 previously.
Gaming duty for offshore operators
From 1 July, a 12 percent offshore gambling duty applies operators who are taking bets from New Zealand residents.
Offshore gambling operators have to register for GST if they make more than $60,000 in a 120-month period. Those that are registered for GST must also now register for the duty.
Excise tax on alcohol increases
The annual adjustment of excise tax on alcohol takes place on 1 July. This is based on movements in the consumer price index in the year to March.
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The chief executive of the Parliamentary Service is confident there will be enough room to accommodate the increased number of MPs and their staff coming into Parliament.
On current numbers, up to 131 MPs could be sitting in the Chamber following the election, brought on by a record overhang result.
Clerk of the House of Representatives Dr David Wilson told the Spinoff that currently the debating chamber had enough chairs to seat 124 MPs – including the Speaker of the House – and work was being done to accommodate more by altering the seating arrangement.
In a statement, Parliamentary Service chief executive Rafael Gonzalez-Montero said planning for a larger Parliament had been going for “some time”.
“Now that the election results have confirmed an increase to the number of members we are looking at several options.
“We are confident we will be able to accommodate all members within the Chamber.”
VNP / Phil Smith
Gonzalez-Montero said office accommodation for members and their staff would be “stretched” for a short time, but the new Members’ Building was only a few months away from “practical completion”.
That building – located behind Parliament – was due to be ready to occupy in April next year and had capacity to accommodate around 30 backbench MPs.
“All members should be in fit-for-purpose accommodation from that point,” Gonzalez-Montero said.
Following the 2023 election, 123 MPs sat in the Chamber – a record number at the time. That decreased to 122 following the resignation of National MP Judith Collins.
Collins held the seat of Papakura and stepped down in May and Parliament voted against holding a by-election because it was too close to the election.
The election result also meant high-ranking National Party MPs like Chris Bishop, Paul Goldsmith, Nicola Willis and Gerry Brownlee – Speaker of the House and an MP for 30 years – would likely not make it back into Parliament.
Only resigning or retiring MPs were permitted to give a valedictory speech meaning none of them would get the chance to give a valedictory statement.
Asked if their would be special allowances for valedictories, Wilson said in a statement that normally only MPs were allowed to speak in the House but the House could suspend its own rules or temporarily alter them.
“It could do so to allow former members to address the House.”
Wilson said no such arrangements could be made until the next Parliament opened and members sworn in.
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