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Residential Property Tax Obligations

  • If you're a landlord, you have to declare your rental income.
  • You must keep accurate records.
  • If your holiday home earned more than $4,000 rent a year, you need to declare the income.
  • If you have 5 or more boarders, you must complete an annual income tax return.
  • If you have flatmates or tenants living in your property, you must include the rental income in your annual income tax return.

It's easier if you use a separate bank account for each of your rental activities.

If you rent out a house or home within your room

If you receive payments for providing accommodation (including through websites such as Airbnb or Bookabach), the income you receive is taxable.

This includes any payment for one-off or irregular rentals.

You must include the amount you receive in your tax return. You can claim deductions for expenses that relate to you earning this income.

If you rent out a holiday home

There are different tax rules if you have a mixed-use holiday home - this is where you use the holiday home yourself, you rent it out as well, and it's unoccupied for 62 days or more.

If you have a mixed-use holiday home and you earn less than $4,000 a year from renting it out, you don't need to include this income in your annual tax return. If you choose not to declare this rental income, you won't be able to claim expenses for the holiday home either.

If you have boarders or home-stay students

If you have five boarders or more then you must complete an annual tax return.

If you have four boarders or less, and the income you earn is under the weekly standard cost set by IRD each year, you don't have to declare this income. If you choose not to declare this income, you won't be able to claim expenses for any costs associated with the boarders either.

If you have flatmates or tenants

If you have flatmates living with you or tenants living in your property, then you must include this rental income in your annual income tax return.

You can work out the expenses you can claim against your rental income in two ways:

  1. Record the expenses that relate to the part of the property you're renting out, and claim these against the rental income you've earned.
  2. Record all the expenses for your property and apportion these according to the part that is rented out. For example, if a flat takes up a quarter of your home, you can claim 25% of the house expenses.Type your paragraph here.

If you are unsure whether any situation applies to you, you should seek professional advice.

What expenses are deductible?

The following expenses can be deducted from your rental income:

  • rates
  • insurance
  • interest paid on money borrowed to finance your property
  • fees or commission paid to agents who collect the rent, maintain your rental, or find tenants for you
  • repairs and maintenance (except if they substantially improve the property)
  • motor vehicle and travel expenses
  • mortgage repayment insurance
  • accounting fees for the preparation of accounts
  • depreciation (but not building depreciation).

​If you're a landlord, then you have certain tax obligations each year. You are responsible for making sure you fulfil the tax obligations for the income you earn.

You have to declare the income

You may have to declare the rental income you earn. Depending on whether you made a profit or a loss, the net rental income earned will be either added to or deducted from your other income.

Keeping records

When you own a rental property you must keep accurate records so that you can calculate the income and expenses of your rental property. These include:

  • bank statements, cheque butts and deposit books
  • invoices and receipts
  • a list of all receipts and payments
  • a list of assets with receipts showing their purchase value and date
  • the rental agreement
  • any loan mortgage agreement
  • working papers for all calculations

You must keep your records for at least seven years, even if you no longer rent out the property.

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