If you’re thinking of listing your home or a space in your home on Air BnB, or other holiday rental sites, you’ll be among 306 others listed within the Taupo region. Success of these short-term rental websites, has created interest at the IRD, and they also want a cut of the action.
IRD expect you to file a tax return if you have earnt income. To make things easier and to ensure you and your home are covered, here are some tips and advice from us.
Keep records
It’s vital to keep good records and track your income and expenses. Get advice on the best use of technology to collate your records.
Claim expenses
Anything you spend renting out a property may be claimed as an expense. For shared expense, it needs to be a fair and reasonable portion. Examples include:
- A portion of your home utilities such as electricity, gas, internet, Sky TV, heating and security.
- A portion of council rates, insurance, and interest.
- Food and consumables (tea/coffee, toilet paper, etc.) that you offer your guests.
- Cleaning and laundry.
- A portion of travel to and from the property
- Depreciation on chattels and appliances exclusively for guest use (e.g. Hair dryers, heater, refrigerators).
- Maintenance of your property. A portion of your upkeep expenses such as gardening could be claimed.
Talk to your insurer and your bank
Advise your bank and your insurance company that you are renting out your home or a portion of it, so they can determine whether any changes need to be made to your account or insurance.
Own a home and rent out another?
If you own more than one home, it is critical to get these in the right tax structures. Talk to your accountant about which property ownership structure best suits your needs.
Need some help?
An accountant will help you assess your needs, minimise your risk and maximise your profits. They can also help take the pain out of filing a tax return. Beker Findlay Allan offers a free consultation to help assess your needs to get you on the right track.
