Aligning the end-of-year repayment obligation threshold

Sections 4, 31, 32, 54, 72 to 87, sections 88 to 100 (repealed), 115, 119, 157, 190, 191, 195, 202, schedule 3 (repealed), and schedule 4, schedule 6 clause 14, section 3 of the Tax Administration Act 1994, and section 123 of the Accident Compensation Act 2011

New section 72 extends the $1,500 threshold that applies to borrowers with income from sources such as interest and dividends to borrowers who derive income such as self-employment and rental income. All borrowers with non-salary and wage income will now have an end-of-year repayment obligation if that income is $1,500 or more, and their total income (including salary and wages) is $1,500 or more over the annual repayment threshold (currently $19,084). This ensures that borrowers have the same repayment obligation regardless of the source of their income.

As separate rules are no longer required for the different types of non-salary and wage income, sections 88 to 100 (subpart 3 of Part 2) have been repealed and schedules 3 and 4 (relating to the application of provisional tax rules) have been amalgamated into a single schedule, schedule 4.

As a consequence of these changes, various definitions and references have also been amended.

Application date

The amendments apply retrospectively from 1 April 2012, for the 2012-13 and later tax years.