Do you own a rental property? If you do, then you will have to file a tax return. We can assist you in preparing your IR3 and Annual financial statements.
We can explain and assist you on:
We can explain and assist you on:
- what income to include in your tax return
- the expenses you can deduct from this income for tax purposes
- the limits on expenses you can claim if your residential rental property makes a loss
- the records you need to keep
- what to do if the property is owned by more than one person
- what happens if the property is sold.
Rental incomeWhich income is taxable? Normally income that you receive from renting out property will be liable for income tax, so you must include it in your tax return. This income could be from renting out land or buildings, or it could be income you earn by having private boarders or flatmates living with you
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Rental EXPENSESExpenses you can deduct from your rental income. When you own a rental property, you're likely to have maintenance and administrative costs. You can claim all or some of these costs depending on how the property is used and the nature of the work being done. If you use the property for both rental and private use, then costs need to be apportioned.
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EXPENSES YOU CAN'T CLAIM
You cannot claim deductions for capital expenses, private expenses, or expenses that do not relate to your rental.
Capital expenses are the costs of buying a capital asset or increasing its value, for example the cost of buying the property and making improvements.
Private expenses are things you buy or pay for that are for your own benefit, rather than to generate rental income.
The following are expenses you can't deduct from your rental income in your tax return:
Accountancy Fees ARE tax deductible. If you use an accountant to prepare your accounts, the cost of the fees are tax deductible. Talk to us.
Capital expenses are the costs of buying a capital asset or increasing its value, for example the cost of buying the property and making improvements.
Private expenses are things you buy or pay for that are for your own benefit, rather than to generate rental income.
The following are expenses you can't deduct from your rental income in your tax return:
- the purchase price of a rental property
- the capital part of any mortgage repayments
- interest on money you borrow for some purpose other than financing the rental property, even if you use the rental property to secure the loan
- the cost of repairing or replacing any damaged part of the property, if the repairs or replacement make improvements to the property and increase its value
- the cost of adding to or improving the property
- real estate agent or legal fees charged as part of selling the property.
Accountancy Fees ARE tax deductible. If you use an accountant to prepare your accounts, the cost of the fees are tax deductible. Talk to us.
ZOE"Apex was highly recommended to me by a friend and I have found them to be incredibly approachable and helpful.
My tax situation has some complex elements and she works hard to find the answers I need. She is willing to go the extra mile for her clients and I would not hesitate to recommend her" |
BUYING OR SELLING PROPERTY?
MAKE SURE YOU KNOW ABOUT THE BRIGHT-LINE RULE
Apex Accountancy can assist you in learning about the New Zealand Bright-Line Rule and for all your tax concerns with your rental property.