So, you’re looking for the latest new zealand ird news because you’ve heard rumblings about tax cuts or maybe you're just worried about being on the wrong side of a "use of money interest" charge. Honestly, keeping up with Inland Revenue (IRD) feels like a full-time job lately. Between the bracket shifts that finally kicked in and the constant tinkering with property rules, it’s a lot to digest.
But here is the good news. For most of us, the 2025/2026 tax year is looking a bit friendlier than the last few. The massive changes to personal income tax thresholds that were "blended" into the previous year are now fully "baked in." This means no more weird calculations for half the year at one rate and half at another. You basically get the full benefit of the higher thresholds from day one.
The Big Shift in Personal Tax Brackets
Let’s talk about your pocket. If you haven’t checked your payslip lately, you’ve likely noticed a tiny bit more cash. That’s because the tax thresholds shifted to help with "bracket creep"—where inflation pushes you into a higher tax bracket even though you aren't actually "richer."
For the 2025/2026 tax year (which ends March 31, 2026), here is how the IRD is slicing your income:
- 10.5% on every dollar up to $15,600.
- 17.5% on the portion between $15,601 and $53,500.
- 30% on the chunk from $53,501 to $78,100.
- 33% on what you earn between $78,101 and $180,000.
- 39% on any dollar over $180,000.
If you're a middle-income earner, say on $75,000, you aren't paying 30% on the whole lot. That’s a common myth. Only the bit above $53,501 gets hit with that 30% rate. The rest is taxed much lower, which brings your "effective" rate down significantly.
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Why the Independent Earner Tax Credit (IETC) matters
The IETC is that "secret" bit of help for people who don't get Working for Families or a benefit. The IRD recently extended the eligibility. Now, if you earn between $24,000 and $70,000, you might be getting up to $20 extra a fortnight. It doesn't sound like much until you realize it's $520 a year just for existing and working. If your income is right on the edge of $70,000, keep a close eye on your year-end "square up," because if you tip over by a few dollars, the IRD might ask for some of that credit back.
The Rental Property Shake-up
If you own a rental or you're trying to buy one, the new zealand ird news regarding interest deductibility is the headline you want. For a while there, landlords couldn't claim interest on their mortgages as an expense. It was rough.
But as of the 2025/2026 year, 100% interest deductibility is back. This is huge for cash flow. If you’re paying $30,000 a year in interest to the bank, you can now subtract that entire $30,000 from your rental income before the IRD even looks at it for tax. It basically treats a rental business like any other business.
The Bright-line Test is now a "Short-line"
The other massive win for property owners is the Bright-line test change. It used to be that if you sold a house (that wasn't your main home) within 10 years, you got smashed with tax on the gain.
Now? It’s back to 2 years.
If you’ve owned a property for more than 24 months, you can generally sell it without triggering the Bright-line tax. Just be careful: if the IRD thinks you bought it specifically to flip it for a profit, they can still tax you under "intention" rules, regardless of the 2-year clock.
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Trusts and the 39% Headache
It’s not all sunshine. If you have a family trust, things got more expensive. The trustee tax rate was hiked to 39% to match the top personal rate. The IRD did this because they noticed people were stashing money in trusts to pay 33% instead of 39%.
There is a small "de minimis" rule though. If your trust earns less than $10,000 in a year (after expenses), it stays at the 33% rate. But be warned: if you earn $10,001, the whole lot gets taxed at 39%. It’s a bit of a cliff edge.
Many people are now looking at "PIEs" (Portfolio Investment Entities) for their trust investments because the tax rate there is capped at 28%. It’s a completely legal way to keep your tax bill down, and the IRD has even said they won't automatically label this as "tax avoidance" as long as it makes commercial sense.
New Fees Free Rules: A January 2026 Update
Just this week, the IRD and the Tertiary Education Commission opened up applications for the "Final-year Fees Free" scheme. This is a shift from the old "first-year free" model.
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Basically, if you finished your first eligible qualification in 2025, you can now jump onto the IRD website to recoup some of those costs—up to $12,000. If you have a student loan, the IRD will just put that money straight against your balance. It’s a great way to start 2026 with a smaller debt. You have until December 31, 2026 to apply if you finished study in 2025, so don't feel like you need to rush today, but sooner is always better.
Avoiding the "Use of Money Interest" Trap
The IRD is also changing their interest rates. Starting January 16, 2026, the rate they charge you for underpaid tax is moving. It’s currently quite high—around 7% to 10% depending on the quarter—which is way more than you'd get in a savings account.
If you are a business owner or a contractor:
- Check your provisional tax. If your income is way higher than last year, don't wait for the IRD to tell you. Pay a bit extra early.
- Watch the March 2026 outage. The IRD is planning a major system update on March 14-15, 2026. Don't try to file your returns or check your balance that weekend; the site will likely be down.
- FamilyBoost. If you have kids in ECE (Early Childhood Education), make sure you're claiming your 25% rebate. It’s capped at $75 a week, but it adds up to thousands over a year.
Practical Next Steps
First, log into myIR and check your "Income Profile." It sounds boring, but if the IRD thinks you're going to earn $80k and you're actually on track for $120k, you’re going to get a nasty surprise in July. Second, if you own a rental, talk to your accountant about the 100% interest deduction—it might change whether you decide to hold or sell this year. Finally, if you’re a student who finished last year, get that Fees Free application in now before you forget.