First-time landlords reminded not to be caught out
First-time landlords in Christchurch and Auckland reminded not to be caught out
First time landlords who rent out temporary accommodation in Christchurch and Auckland are being reminded they have to pay tax on their rental income.
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 is under pressure with people being displaced from their homes and workers moving 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.
“Many people renting out accommodation may be first-time landlords and some may not be aware they have to pay tax. We welcome the work Inland Revenue is doing with first-time landlords and believe this is much needed,” said Mr King.
Rental income is taxable, including income received from residential property, a room in your own home, sleep outs, caravans and holiday homes.
In Christchurch many are renting out accommodation for only four or five weeks while people are having their homes renovated.
Inland Revenue Group Manager Investigations and Advice, Patrick Goggin said people on salary and wages may not have completed a tax return before and may not know they need to file an income tax return if receiving 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,” said Mr Goggin.
Income tax returns are due to Inland Revenue by 7 July and can quickly and easily be filed using myIR on Inland Revenue’s website.