Amendments to charitable donation rules: what you need to know
In Budget 2026, the Government introduced new tax rules around donations for the charitable and not-for-profit sector. The aim was to ensure ‘the system remains fair, credible and trusted for charities and not-for-profits’.
“These changes are about striking the right balance between simplification, fiscal sustainability and ensuring the system has integrity.”
Revenue Minister, Simon Watts
The key amendments to charitable donation
Charities and non-profits play a vital role in supporting Kiwi communities across the country. So the tax rules for donations need to be fair and support the vital work of these organisations.
Key changes that will be brought in across 2027 and 2028 will include:
Increasing the amount of net income a non-tax expempted not-for-profit organisation can earn without paying tax from $1,000 to $10,000.
Ensuring the donation tax credit scheme remains financially sustainable by capping eligible donations at $100,000 per year. This will also limit tax planning risks that can arise when a donor makes a gift to a charity they control themselves.
Allowing donors to receive their donation tax credit refunds throughout the year in certain circumstances, rather than waiting until the end of the tax year.
Allowing donors to gift their donation tax credit to a charity.
Ensuring that membership subscriptions and levies received by not-for-profits remain non-taxable.
Planning out your tax strategy as a non-tax exempt charity or non-profit
Increasing the point at which your organisation begins paying tax (now raised to $10,000) will make charitable income and donations go further. But it’s also advisable to regularly review your tax planning strategy, so you can optimise any tax incentives or reliefs.
Book some time with our team for a tax planning review. We’ll be happy to explain the impact of the new rules and where there are opportunities to maximise your charitable income.
