This Interpretation statement considers how the interest limitation rules apply to interest incurred for property used to provide short-stay accommodation. It also explains what other income tax rules may be relevant to any interest that is deductible, depending on your circumstances. This Interpretation statement explains how the rules apply to natural persons and trustees only.

CA ANZ suggest that the following issues should be referred to Inland Revenue’s Policy and Regulatory Stewardship (PaRS) for their consideration: 

• The land taxing provisions are inconsistent and too complex, and should be rewritten, and 
• When considering whether land is “farmland”, this should be considered from the point of view of the relevant taxpayer, rather than by the legal title of the land.