Specialist Rental Property Tax Accountants in Auckland
At ABA Chartered Accountants, we make rental property accounting simple, help you minimise tax, and take care of your rental property tax returns.
Whether you are a residential or commercial property investor, we can help you manage tax returns for all your rental property investments.
Our experienced rental property tax accountants provide clear, practical support to help you maximise returns while ensuring you stay compliant with ever-changing tax rules. From tax returns to direct communication with the IRD, we take the stress out of your property accounting and provide you with end-of-year Rental Property Financial Reports that are easy to understand.
Whether your interest is in long-term buy-and-hold properties, property development, or trading, ABA are the specialist property investment accountants in Auckland who can assist you with your property goals and tax obligations.
First time property investors?
Be aware of recent legislative changes relating to property investment!
If you’re a first-time investor or planning to expand your property portfolio, it’s more important than ever to seek advice from experienced rental property tax accountants before signing a Sale and Purchase Agreement.
Recent legislative changes around the bright-line test, interest deductibility, and ring-fencing of rental losses can all impact your investment returns.
Get in touch with us now and make sure you start off armed with the right knowledge – so there are no nasty tax surprises.
Rental Properties – Which Business Structure Should I Use?
The most appropriate entity for your property investment will depend on your circumstances and goals. Getting the structure right from the start can help you maximise your yields and reduce your tax burden.
Common property accounting structure questions include:
- Should I set up a look-through company (LTC)?
- Should my trust be a shareholder?
- How do I separate my business and property investment structures?
- How should I structure finance to maximise interest deductibility?
- How do associated persons rules affect me?
- How can I pay less tax on my rental properties?
ABA can guide you through these decisions, ensuring your structure supports efficient rental property tax accounting.
Legislative Changes Affecting Property Investors
Interest Deductibility
From 1 April 2024, investors can claim 80% of interest incurred on funds borrowed for residential property, regardless of when the property was purchased.
From 1 April 2025, rental property tax accounting rules will allow full deductibility at 100%.
Contact ABA for further advice and assistance.
Brightline Test
Brightline Test – Recent Changes
The bright-line test has changed from 1 July 2024. Properties sold within 2 years of acquisition will now be subject to tax on profits.
*This test is complex, and we recommend consulting our specialist rental property tax accountants before any purchase or sale.
Previous Legislation
- The two-year bright-line test was introduced on 1st October 2015 and applied to residential land that a person first acquired an interest in, on or after 1st October 2015.
- Note that the “start date” for the bright-line test is the date on which the instrument to transfer the land to the person was registered under the Land Transfer Act 1952.
- The bright-line test was extended to five years for properties bought on or after 29th March 2018.
- Therefore, any residential properties acquired after 29th March 2018 if sold within five years, would have been caught under this rule, and profits would be taxable.
The bright-line rules are complex and unforgiving, and there are instances where they don’t apply.
We highly recommend that you consult us as specialist accountants for property investors so that we can advise you on bright-line tax planning prior to buying or selling any residential investments.
Ring Fencing of Rental Losses
Ring Fencing of Rental Losses
Since 1 April 2019, rental losses can no longer be offset against other income. They are carried forward and can only be offset against future rental profits or taxable sales.
Historical Information about Ring Fencing of Rental Losses
- New legislation was introduced into Parliament on 5th December 2018 as part of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill. Once passed in Parliament, it has been applied retrospectively from 1st April 2019.
- From that date, a rental loss generated from renting residential properties cannot be applied against other types of income. The rental loss will carry forward to the next year and can only be applied against future rental profit or taxable gains on the sale of the residential rental property.
- The ring fencing will be applied on a portfolio basis, which means a loss from one property can be offset against a profit from another property. Taxpayers can elect to apply the rules on a property-by-property basis if they do not want to apply them on a portfolio basis.
- For the purposes of ring fencing, the definition of residential land does not include a person’s main home, a property that is subject to the mixed use asset rules (for example a bach that is sometimes used privately and sometimes rented out), or land that is held/used in a land-related business (for example a sub-division or land development business).
For further information regarding Ring-fencing of Rental Losses please contact ABA as your specialist property accountants.
Why Choose ABA Chartered Accountants?
- Expertise in rental property tax accounting and compliance, including the latest legislation.
- Support for landlords, investors, and developers at all stages of property ownership.
- Practical tools like Xero setup, training, and support for easier property accounting.
- Hands-on advice from experienced property investment accountants in Auckland, keeping your property investments tax-efficient and compliant.
GST on Property Purchases and Sales
If you are considering becoming a property trader or developer, then you will need to register for GST and consider the implications of GST when you enter into a Sale and Purchase Agreement.
Likewise, if you are registered for GST and are selling a property you will need to account for GST on the sale.
Errors in accounting for GST on property transactions are very common and can be very costly.
Such errors include incorrectly recognising GST on zero-rated transactions which occurs when both the vendor and purchaser are registered for GST and the purchaser is not aware of this.
Another common error is not claiming GST on property acquired from non GST-registered persons.
ABA’s rental property tax accountants ensure your GST obligations are correctly managed, helping you avoid common and expensive errors.
Contact ABA Chartered Accountants Today
From managing complex tax rules to streamlining your rental property accounting, ABA Chartered Accountants are the rental property tax accountants and property investment accountants in Auckland you can rely on.
Contact us today to ensure your property investments are in expert hands.
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