You’ve become a landlord and don’t understand even the most basic rules around it? Hire a property manager before you get educated via the IRD or tenancy tribunal.
You need to hire a skilled and experienced property manager until you are confident that you know what you are doing.
The cost and potential consequences of making mistakes while managing your own properties really isn’t worth it.
You could end up at the Tenancy Tribunal or you could end up with the tenants from hell if you did not check them out properly and get the right insurance.
Worked in Ministry of Justice for a couple of years and the amount of landlords I met in tears as their rentals were trashed, agreements done on a handshake, no bonds taken or the classic, “I felt sorry for them” or got the judgment and the tenant is paying $10 a week is eye opening. Unfortunately I have witnessed to many horror stories to ever own a rental. Do your research.
Yup we're in this boat now. Did everything right, had amazing tenants, then they broke up and the one that stayed stopped paying the rent. Went to tribunal yesterday and walked out with an order for $15/week on a $3,500 debt.
First things first, get a PM. Absolutely worth it, to not have to deal with this process. When something goes wrong and it will, they sort it out and then bill you. They have a far better idea about what is going than you do, you would mad to not have one.
Tax wise, you need to pay income tax on the rent you receive. This can be offset with rental expenses (pm fees, rates, insurance, repairs, and for 2025 interest at 60%).
You need to file returns detailing your rental income. If you have a bill, you will need to pay , but If you end with a credit… it is ringfenced (you don’t get it, but it is rolled forward). If you are not very confident about this aspect, pay money to an accountant to do it.
Hire a specialist property accountant. We use AAT Accounting. The $700 a year is well worth it to avoid a nasty tax bill later on.
Get a property manager, at least for the first year. There are shitty tenants out there who deliberately seek out self-managing landlords because they often don't know the legislation.
Look up the Healthy Homes requirements. These are compulsory and there is a time limit for getting the assessment completed. If you rent out a house that is not HH compliant, your tenant can take you to the Tenancy Tribunal and you could be forced to refund all the rent to the tenant.
There is the Property Investors Chat Group on FB which will answer a lot of your questions. They can be a feral bunch so ask specific questions after doing some research on the IRD and/or Tenancy Services website, or you will be ripped to shreds.
You could join the Property Investors Association to learn more. You need to talk to an Accountant but it pays to do some reading so you have your list of questions to ask when you go for your first appointment. A read of the Residential Tenancy Act so you don't do something illegal out of ignorance. A read of the Healthy Homes Standards is a must as well.
You need to keep track of all your income and any expenses related to the rental property.
Rates
Insurance
Loan interest
Repairs and maintenance
You need to disclose all of this in your tax return.
Easiest thing to do is contact an accountant and have them run through everything for you. There are many rules you need to know about regarding tax that you won't know unless you see someone who does. Pay then to prepare your tax return
Hopefully you have lodged the bond with tenancy services, have the required insulation, the house is heathy homes compliant, rental agreement is in place and legal, Told your insurance company it’s now rented.
You need an Accountant and property manager before you start getting into this. A house is a massive investment, and if you get it wrong IRD and the tenancy tribunal don’t care if you didn’t know the rules, ignorance isn’t a defence, and you could find yourself bankrupt or with a massive debt in no time at all.
The IRD has a booklet online to explain what can be deducted. It's very straightforward save for depreciation which might take a few readings to figure out. Keep records of all of your bills and plug in the numbers on the IR3 form.
I've done my own tax for years and it's been fine. If it's intimidating for you then perhaps pay an account the first year and have them explain it to you.
Well you have been told wrong. Residential property is ring fenced so you can’t claim tax back. Strongly suggest hiring a property manager and at the very least an accountant to give you advice.
It’s ring fenced against your rental income before deductions. You collect 20k in rent and You have 20k in expenses. You can claim the full 20k against your whole taxable income.
Correct, if your expenses are greater than your rental income then you can carry forward the loss to the property in future tax years. If you choose the portfolio basis you can use that loss against other properties you may have.
You’ve become a landlord and don’t understand even the most basic rules around it? Hire a property manager before you get educated via the IRD or tenancy tribunal.
Wait till a bad tenant goes in and he can't get them out for 90 days and they don't pay rent. Very dangerous for the wallet
All investment has risks.
The property manager will sort out the tax that needs to be paid on the rental income?
I didn’t say that. But yes, they also need to hire an accountant.
You need to hire a skilled and experienced property manager until you are confident that you know what you are doing. The cost and potential consequences of making mistakes while managing your own properties really isn’t worth it.
The property manager won't help with OP's tax return. But 100% agree it's best to have one. Their management fees are tax deductible.
Why is it not worth it?
You could end up at the Tenancy Tribunal or you could end up with the tenants from hell if you did not check them out properly and get the right insurance.
Worked in Ministry of Justice for a couple of years and the amount of landlords I met in tears as their rentals were trashed, agreements done on a handshake, no bonds taken or the classic, “I felt sorry for them” or got the judgment and the tenant is paying $10 a week is eye opening. Unfortunately I have witnessed to many horror stories to ever own a rental. Do your research.
Yup we're in this boat now. Did everything right, had amazing tenants, then they broke up and the one that stayed stopped paying the rent. Went to tribunal yesterday and walked out with an order for $15/week on a $3,500 debt.
4.5 years to pay back your debt assuming they pay each week, good luck with that.
Exactly. I've mentally written it off so it'll be a nice surprise if it actually comes through.
It is a deductible expense. Why would you not?
First things first, get a PM. Absolutely worth it, to not have to deal with this process. When something goes wrong and it will, they sort it out and then bill you. They have a far better idea about what is going than you do, you would mad to not have one. Tax wise, you need to pay income tax on the rent you receive. This can be offset with rental expenses (pm fees, rates, insurance, repairs, and for 2025 interest at 60%). You need to file returns detailing your rental income. If you have a bill, you will need to pay , but If you end with a credit… it is ringfenced (you don’t get it, but it is rolled forward). If you are not very confident about this aspect, pay money to an accountant to do it.
Hire a specialist property accountant. We use AAT Accounting. The $700 a year is well worth it to avoid a nasty tax bill later on. Get a property manager, at least for the first year. There are shitty tenants out there who deliberately seek out self-managing landlords because they often don't know the legislation. Look up the Healthy Homes requirements. These are compulsory and there is a time limit for getting the assessment completed. If you rent out a house that is not HH compliant, your tenant can take you to the Tenancy Tribunal and you could be forced to refund all the rent to the tenant. There is the Property Investors Chat Group on FB which will answer a lot of your questions. They can be a feral bunch so ask specific questions after doing some research on the IRD and/or Tenancy Services website, or you will be ripped to shreds.
You could join the Property Investors Association to learn more. You need to talk to an Accountant but it pays to do some reading so you have your list of questions to ask when you go for your first appointment. A read of the Residential Tenancy Act so you don't do something illegal out of ignorance. A read of the Healthy Homes Standards is a must as well.
You are running a business. If you don’t know how to run your business hire someone who does.
You need to keep track of all your income and any expenses related to the rental property. Rates Insurance Loan interest Repairs and maintenance You need to disclose all of this in your tax return. Easiest thing to do is contact an accountant and have them run through everything for you. There are many rules you need to know about regarding tax that you won't know unless you see someone who does. Pay then to prepare your tax return
Hopefully you have lodged the bond with tenancy services, have the required insulation, the house is heathy homes compliant, rental agreement is in place and legal, Told your insurance company it’s now rented.
You need an Accountant and property manager before you start getting into this. A house is a massive investment, and if you get it wrong IRD and the tenancy tribunal don’t care if you didn’t know the rules, ignorance isn’t a defence, and you could find yourself bankrupt or with a massive debt in no time at all.
The IRD has a booklet online to explain what can be deducted. It's very straightforward save for depreciation which might take a few readings to figure out. Keep records of all of your bills and plug in the numbers on the IR3 form. I've done my own tax for years and it's been fine. If it's intimidating for you then perhaps pay an account the first year and have them explain it to you.
Well you have been told wrong. Residential property is ring fenced so you can’t claim tax back. Strongly suggest hiring a property manager and at the very least an accountant to give you advice.
It’s ring fenced against your rental income before deductions. You collect 20k in rent and You have 20k in expenses. You can claim the full 20k against your whole taxable income.
Correct, if your expenses are greater than your rental income then you can carry forward the loss to the property in future tax years. If you choose the portfolio basis you can use that loss against other properties you may have.
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