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What Does Paying Tax On Rental Income Involve?

What Does Paying Tax On Rental Income Involve
What Does Paying Tax On Rental Income Involve
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Did you know that if you rent out your home to others, you will be required to file a tax return on that income received from the rental property, like you would do for other income received?

Needing to file a tax return, and pay tax on their rental income can apply to those who have an overseas residential property, are joint owners of a rental property, or are not New Zealand residents but who earn rental income from their New Zealand properties.

To work out what tax there is to pay, you must deduct your allowable rental expenses from your gross rental income.

Rental income needs to be brought to your accountant at market value, usually done by determining the amount being charged to an arms-length or third party tenant. If you are renting to a family member and letting them have it at a rent that is below the market value, doing so will impact the deductibility of interest and other costs.

The way in which income and expenses are worked out is not the same for all residential properties, and you must ensure that you are doing so according to what your property is classed under.

For assistance with filing a tax return on your rental property income, you can come to see us. We’ll ensure that you’re complying with your tax obligations when it comes to your rental property.

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