Rental Losses

New legislation has changed how losses on rental properties can be treated.

  • Starting from 1 April 2019, the loss ring-fencing rules will mean that if you own a residential rental property, you won’t be able to offset the losses from the rental properties against your other income (for example, salary or wages, or business income), to reduce your taxes.
  • The losses can be used in future years, when the properties are making profits, or if you are taxed when the property is sold.
  • If you have more than one rental, you will be able to offset losses from one rental property against rental income from other properties – calculating their overall profit or loss across their portfolio.

These rules will also apply to any residential properties that aren’t in New Zealand.

The rules would not apply to:

  • Your main home
  • A property that is a mixed-use asset – e.g. a bach that is sometimes used privately and sometimes rented out
  • Land that is held in a business of land dealing, development of land, division of land, or building.

If you’d like to discuss how this will affect you, please give us a call on 03-352-1076 or contact us

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