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Residential Property Tax Obligations
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:
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:
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.
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:
You must keep your records for at least seven years, even if you no longer rent out the property.
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21 Galloway Street, Hamilton East, Hamilton 3216, NZ
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