The Taxation (Thresholds for Community Housing Entities) Regulations 2016 (LI 2016/220), which are deemed to have come into force on 1 August 2016, increase the value of income and asset thresholds in sch 34 cls 1 and 2(2) of the Income Tax Act 2007 (the Act). The increased thresholds align with changes to the eligibility criteria for the KiwiSaver Homestart grant that took effect on 1 August 2016.
The thresholds are relevant to the definition of community housing set out in s CW 42B of the Act. Section CW 42B provides that income derived by a community housing entity is exempt income under the Act.
Among other things, whether a trustee or company (an entity) whose activities involve the provision of housing or housing assistance is a community housing entity will depend on the income and assets of people who become clients or beneficiaries of that entity on or after 14 April 2014 (see Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016). If more than 15% of those people have an income or assets that exceed the relevant thresholds (measured on the date a person becomes a client or beneficiary), the entity will not be a community housing entity under s CW 42B.
The Regulations were notified in the New Zealand Gazette on 29 September 2016.