by The Landlord
More than 44,000 households rented their home in the greater Christchurch area according to the 2013 Census and housing demand in the city is expected to reach its peak in the fourth quarter of 2014.
Andrew King, executive officer for the New Zealand Property Investors' Federation, said accommodation in Christchurch was under pressure because people had been displaced from their homes and workers had moved to the city to help with the rebuild.
“More people are renting out all or parts of their properties. In Auckland there is a high demand for rentals and a constant turnover of landlords."'
Inland Revenue group manager investigations and advice Patrick Goggin said people on salary and wages might not have completed a tax return before and might not know they needed to file an income tax return if they received rental income.
“Inland Revenue is working closely with new and temporary landlords in Christchurch and Auckland to help them understand their tax requirements. Taxes help to provide important public services like hospitals, education and the Government’s contribution to the Christchurch rebuild.
“People who are thinking of renting out accommodation should find out what tax they’ll need to pay so they can include it in their plans. If landlords have been renting out property for some time and have not saved their tax payments they may find themselves under some pressure and we would encourage them to speak to us as soon as possible,” he said.
King said his organisation welcomed the IRD’s work to inform landlords of their obligations.
“Many people renting out accommodation may be first-time landlords and some may not be aware they have to pay tax. Most investors operate on a part-time basis and won't be up-to-date on their tax obligations.”
Rental income is taxable, including income received from residential property, a room in your own home, sleep outs, caravans and holiday homes. But King said many landlords would also not be aware of the expenses they could claim. He said they should seek the advice of an accountant with experience in property investment.
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