Table: Summary of analysis Impacts Meets objectives Option Net impact Administrative and compliance a, b, c, d or e? Fiscal/economic impact Risks impacts 1 Accommodation Partially meets Tax system Additional fiscal cost of $500,000 No additional administrative Medium risk of some Does not address – supplement a. per annum. costs this option is as complex affected housing the problem – Fully meets b, as the status quo. providers being definition and and c. ineligible for the income meets three of the CHEs Some affected housing providers No additional compliance costs – tax exemption and donee five objectives. will have future tax costs because this option is as complex as the status if the income their recipients will be on incomes status quo. threshold is linked to above the threshold. accommodation supplement income levels. 2 KiwiSaver Partially meets Tax system Additional fiscal cost of $500,000 Administrative savings for Inland Low risk of some Addresses the – HomeStart c. per annum. Revenue from having affected housing problem definition income thresholds to observe. providers being and meets four of Fully meets a, b, ineligible for the income the five CHEs Most if not all affected providers Tax compliance cost savings for d and e. tax exemption and donee objectives. will qualify for the income tax eligible CHEs as they will have status if the income exemption and donee status fewer income thresholds to threshold is linked to the because their recipients will be on observe. This is the option KiwiSaver HomeStart incomes below the threshold. preferred by income levels. Improved taxpayer certainty. officials. Does not take into account housing affordability stress. 3 Lower quartile None Tax system A fiscal gain of $2.4 million. See Nil. High risk of all affected Does not address – of household comment on next page. housing providers being the problem ineligible for the income definition and income (status quo) CHEs Potentially all affected housing Nil. tax exemption and donee does not meet the providers will have future tax costs status if the income objectives. because their recipients will be on threshold is linked to incomes above the threshold. lower quartile of household income levels.
Table: Summary of analysis Option Meets objectives a, b, c, d or e? Impacts Net impact Fiscal/economic impact Administrative and compliance impacts Risks 1 – Accommodation supplement Partially meets a. Fully meets b, and c. Tax system Additional fiscal cost of $500,000 per annum. No additional administrative costs – this option is as complex as the status quo. Medium risk of some affected housing providers being ineligible for the income tax exemption and donee status if the income threshold is linked to accommodation supplement income levels. Does not address the problem definition and meets three of the five objectives. CHEs Some affected housing providers will have future tax costs because their recipients will be on incomes above the threshold. No additional compliance costs – this option is as complex as the status quo. 2 – KiwiSaver HomeStart Partially meets c. Fully meets a, b, d and e. Tax system Additional fiscal cost of $500,000 per annum. Administrative savings for Inland Revenue from having income thresholds to observe. Low risk of some affected housing providers being ineligible for the income tax exemption and donee status if the income threshold is linked to the KiwiSaver HomeStart income levels. Does not take into account housing affordability stress. Addresses the problem definition and meets four of the five objectives. This is the option preferred by officials. CHEs Most if not all affected providers will qualify for the income tax exemption and donee status because their recipients will be on incomes below the threshold. Tax compliance cost savings for eligible CHEs as they will have fewer income thresholds to observe. Improved taxpayer certainty. 3 – Lower quartile of household income (status quo) None Tax system A fiscal gain of $2.4 million. See comment on next page. Nil. High risk of all affected housing providers being ineligible for the income tax exemption and donee status if the income threshold is linked to lower quartile of household income levels. Does not address the problem definition and does not meet the objectives. CHEs Potentially all affected housing providers will have future tax costs because their recipients will be on incomes above the threshold. Nil.
2015-ris-sop-129-arrdrm-bill.docx