Landlords: new rules for residential property tax deductions

Landlords:  new rules for residential property tax deductions

From the 2019-20 income year onward, new rules apply to deductions claimed for residential properties.

Residential property deductions will now be ring-fenced, meaning they can only be used to offset income from residential property.

You cannot use rental losses to offset other income like salary and wages.

Also, residential property deductions you claim for the year cannot exceed the amount of income you earn from the property for the year.  Any excess deductions must be carried forward from year to year until they can be used.

If you have more than one property, you can choose to apply these rules on a portfolio basis or on a property-by-property basis.

Find out more on the Inland Revenue website:   https://www.classic.ird.govt.nz/property/property-rental/tax-obligations/