Here is a quick checklist of what you can and can’t claim on your rental property.
What can I claim?
Capital or private expenses can’t be deducted from your rental income. Capital expenses are costs you incur to buy or increase the value of a capital asset.
The following expenses can be deducted from your rental income:
- Rates and insurance
- Interest paid on money borrowed to finance your property
- Agents fees and commission relating to the rental of the property
- Repairs and maintenance (except if they substantially improve the property)
- Motor vehicle and travel expenses
- Legal fees for arranging the mortgage or finance to buy the property
- Legal fees for buying and selling a property can be deducted. This is provided your total legal expenses for the income year, including the fees associated with buying and selling a property, are equal to or less than $10,000.
- Mortgage repayment insurance
- Accounting fees for the preparation of accounts (we will add this in)
What can’t I claim?
Capital or private expenses can’t be deducted from your rental income. Capital expenses are costs you incur to buy or increase the value of a capital asset. Private expenses are incurred for your own benefit and are not connected with producing taxable income.
The following are non-deductible expenses:
- The purchase price of a rental property
- The capital part of any mortgage repayment(s)
- Interest on money which you borrow for some purpose other than financing the rental property, even if you use the rental property to secure such a loan
- Any repairs and maintenance that go beyond replacement and are in fact improvements to the property
- Real estate agent’s fees incurred as part of buying or selling the property
- The cost of making any additions or improvements to the property (Capital Improvements)
- Depreciation on the buildings from the 2011 – 2012 income year
Can I claim on overseas rental properties?
As a citizen of New Zealand you are able to claim deductions for expenses incurred by any of your overseas rental properties. You may also claim a credit for any taxes paid outside of New Zealand on the rental income you acquired. Overseas property rental income must be included in your tax returns by law. This includes rental income earned from any renting of land, buildings, private boarders, tenants, and roommates in your rental property outside of New Zealand.
Why NZ Rental Tax Services?
There are so many tax rules and laws that it can be overwhelming which often leads to mistakes. Our dedicated team of professionals will do all the work for you. Just send us all the necessary information and we will begin the process.
How can I submit my return?
NZ Rental Tax Services makes it easy for you. We offer three straightforward ways of getting your property rental tax information to us to take advantage of our well-priced, efficient and friendly accounting service.
1. Online Return
Click here to fill in our online form – the most efficient method.
2. FREE Accounting Spreadsheet
Even if we don’t do your accounting you are welcome to download and use our free spreadsheet – see it here.
3. Snail Mail – The Retro Choice!
If neither of the above appeals to you, click here to learn about our old-school hard copy option.
What about vacation and holiday homes?
If you have a home that you use for both your personal vacation home and rental property you will under one of the three categories: fully deductible, apportioned expenses, and non-deductible.
- Fully deductible: Expenses such as costs for advertising are fully deductible.
- Apportioned expenses: Are based on the amount of time spent in the vacation home versus the amount of time rented out.
- Non-deductible: Any personal expenses spent on your vacation home for personal use is non-deductible.
You are welcome to telephone us any time – if we’re busy just leave us a message and we’ll get straight back to you. We are on-line 9am – 9pm 7 days a week so call us at your convenience! Or, if you prefer, email us or use the contact form to the right.
PO Box 40334, Glenfield, Auckland 0747
Monday - Sunday: 9am - 9pm