7 NZ Rental Tax Tips From The Pros

7 NZ Rental Tax Tips From The Pros


The word “tax” is very much dreaded by a lot of people. Place it next to the word “rental” and it can be very confusing. When it comes to NZ rental tax or investment property tax New Zealand, it is important that you know the rules in filing for this in order to be on the safe side of the law – but where do we begin? Here are 7 NZ Rental Tax tips from the pros themselves.

Claim deduction for small purchases

If you are a property investor, you can claim deductions for different kinds of expenses. For example, any business-related expense under a certain amount as indicated in existing laws or guidelines can be identified as a deduction.

Business trips are considered deductibles

Stemming from the previous point, business trips are also considered deductibles. With investment property tax New Zealand, as long as you can prove that it is done for the purpose of you conducting your regular business operations, then it can be deducted.

Make sure you separate business-related trips from vacations

If business trips are deductibles, what happens if you went on a trip for the purposes of both business and vacation. Well, if you went on a business trip for 3 days and decided to stay another day for vacation, then the expenses on the last day won’t be considered a deductible.

Car expenses and mileage can be deducted if they are business-related

As a property owner, you will most likely visit numerous places where your properties are located for viewings, inspections, and open homes. While it can be very time-consuming to record all of your expenses for travel, it can help you save money by paying less on tax.

Properly differentiate maintenance from improvements

You’ll be able to see the pattern when it comes to tax deductibles, and this is also the same for NZ Rental Tax or investment property tax New Zealand. When it comes to maintenance fees, make sure to properly differentiate it from actual home improvements. Only repairs and maintenance fees are considered tax deductions.

Not all interest payments are deductible

Keep this in mind to avoid confusion when filing for your taxes: not all interest payments are deductibles. Even interests on loans you have used to buy the rental won’t be considered unless they are specifically tied to that property.

Outsource your accounting

Finally, outsource your accounting. Professionals who deal with all kinds of taxes are more equipped to identify which are deductibles and which are not. You need their expertise to ensure that you won’t lose any sleep on taxes. Be sure to hire the right accountant who can help you minimize your tax bill.

Final Thoughts

Most property owners and property investors would think that hiring an accountant is a waste of time and money – this is one of the biggest misconceptions about tax accountants. Not only will you get expert advice on your business’ tax compliance but you’ll also be able to save thousands (or even more) with an accountant.

David Lockhart