That’s due to an unexpected ‑ but welcome - provision contained in the Government’s $12.1 billion Covid-19 economic stimulus package announced on March 17.

The provision reinstates depreciation deductions for commercial and industrial buildings. Depreciation is the process which allows property owners to write off a bit of the value of their assets each year, which reduces their tax bills.

It used to be possible for buildings with an estimated life of 50 years or more to be depreciated at a rate of 2% per year.

However, from April 2011 on, depreciation deductions on both commercial and residential buildings were no longer allowed.

Now, it’s changed again – with a Bill to be introduced shortly which will allow commercial property owners to depreciate buildings (at 2% for the 2020/21 year, effective immediately.

That means they will receive a tax boost worth hundreds of thousands of dollars.

Property Council of New Zealand chief executive Leonie Freeman says their members are very pleased to see depreciation deductions for commercial and industrial buildings reinstated.

“It’s a policy change that we have been calling for since depreciation deductions were first removed in 2010. It also aligns with our recommendation to the Tax Working Group in 2018.”

With every crisis comes opportunity, and the property industry has a big role to play in lifting the country out of recession during these uncertain times, Freeman says.

“As an industry we must take this opportunity to work with the Government to develop policies that allow us to create cities where communities can thrive.

“If we work together, we could re-set years of poor planning and under-investment, emerging to be better placed to face the future.

”Depreciation deductions have not been reinstated for residential rental properties.