Do You Have A New Zealand Rental Property?
Many New Zealanders rent out their homes as they sample the Australian way of life. Even if you are renting out your own property you are still required to file a New Zealand tax return on that rental income along with any other New Zealand-sourced income. That applies even if you are renting the property to friends or family.
Filing an Income Tax Return in Australia does not, in any way, relieve you of the obligation to file an Income Tax Return in New Zealand.
If you rent out a property in New Zealand you are required to file a rental property tax return in New Zealand.
The calculations are very different from the way the tax returns are done in Australia so it is important that you do not use your Australian calculations when completing a New Zealand Income Tax Return.
Rental income is required to be brought in at market value. That is usually determined by the amount being charged to an arms-length or third-party tenant. If you are letting your property out at below market rent (perhaps to a family member) that will impact on the deductibility of interest and other costs. It is important you get appropriate advice before filing your Income Tax Return.
It is a common mistake to believe that, if you are an Australian tax resident, you are not required to file a New Zealand Income Tax Return. The Double Tax Agreement between Australia and New Zealand doesn’t impact on this sort of activity.
What it does mean is if you are required to pay tax in New Zealand you will generally be able to claim a Foreign Tax Credit on this amount against any Australian tax payable on that rental income. The timing and amount of the credit depends on a number of things and you should check with your Australian tax agent or accountant before making a claim.
As we are not Australian tax agents we cannot advise on Australian tax issues.
There is no charge for a quick chat so give us a call on 1300 791 600 and we can talk you through the issues.
Didn’t Know You Had To File A New Zealand Tax Return For Your Property?
The news that New Zealanders should be filing Income Tax Returns on rental properties located over there can come as a shock.
We constantly hear from New Zealanders who left their homeland a long time ago and understood that if they were declaring that rental income in Australia they had met their obligations.
This is simply not the case. We can help.
As we are constantly in contact with Inland Revenue helping expat New Zealanders put matters right, we have a good degree of success in negotiating away the penalties. We’ll speak to Inland Revenue on your behalf, prepare the necessary disclosures and complete your Income Tax Returns at a discount.
When we complete 5 or more years of tax returns at one time, we will not only discount our usual (and very competitive) fee, we will also plead your case to Inland Revenue on your behalf at no additional cost at all.
You get a completely clear conscience and a discount to boot!
We Can Have Your NZ Income Tax Returns Completed Within Two Weeks
We can usually have your New Zealand Income Tax Return completed within a fortnight and all tax returns are completed on a “fixed fee” basis. That means we agree the fee upfront so you have absolute certainty on how much it will cost to complete your New Zealand tax return.
We start processing the work once we have all of your information, so the fortnight starts from that date.
We Can Invoice You In Either Australian Or New Zealand Currency
Our prices are quoted in Australian currency. But if you prefer, you can pay the New Zealand equivalent on any or all of our services. We accept both Australian and New Zealand currency and can model our operation so that you can receive your invoice with either New Zealand or Australian GST.
For One Property – $380 (including GST)
Our fixed fee for preparing a New Zealand rental property tax return for an individual taxpayer is $380. And we also have extension of time privileges which means we can file your tax return after the NZ tax filing date without penalty (providing you contact us before a penalty has been charged!).
Joint Owned Property – $380 (including GST)
If the rental property is owned by 2 individuals (for example if you jointly own the rental property with a partner) then the fee of $380 includes preparing the Rental and Income Tax Returns for both of you. Yes, the one already-low fee covers both tax returns.
For Two Or More Properties – Simply add $100 (including GST) for each additional property
If you own two or more rental properties then our fee will increase by $100 for each additional rental property. For example, the cost of preparing New Zealand Rental Property Tax Returns for both a husband and wife who jointly own two rental properties in New Zealand would be $480 (including GST).
Is Your Rental Property Owned By A Trust Or A Company?
Many New Zealanders have a rental property owned by a family trust or even a New Zealand company (particularly look-through companies).
If your tax structure is a little more complex then our fees are a little more to account for the additional work.
If your New Zealand rental property is owned by a Trust or Company you can engage us to prepare and file your New Zealand Income Tax Return by clicking on the secure form below or phoning us on 1300 791 600.
New Zealand Trust – $600 (including GST)
If you have arranged things so that your rental property is actually “owned” by a Trust then our fee is $600 for the first property. There will be an additional fee of $100 (including GST) for each additional rental property.
We will also prepare the annual resolutions required to be passed by the Trustees of the Trust.
There can often be a New Zealand tax advantage in allocating income from the Trust to beneficiaries. We can advise on the best course of action.
Our standard fee includes the cost of preparing an Income Tax return for one beneficiary (providing the only income for that beneficiary is income from the Trust). We can prepare Income Tax Returns for other beneficiaries at a fee of just $80 (including GST) per tax return (again, providing the only income is the distribution from the Trust).
This will help you to minimise any income tax payable. There are particular rules that will apply and we will ensure you understand them.
New Zealand Trusts offer an unparalleled amount of protection. However this protection can be lost if the Trust is not governed correctly by the Trustees. The resolutions we prepare will assist the Trustees to meet their requirements which, in turn, will enable the Trust to continue it’s activity without running the risk of exposing it’s assets to your creditors.
NZ Company Tax Returns – $600 (including GST)
(including Look-through Companies)
A number of New Zealanders have their rental properties in the ownership of a New Zealand company. In the old days there were known as LAQC’s (Loss Attributable Qualifying Company) and in today’s parlance we have Look-through Companies.
If you have a rental property that is owned by a New Zealand Company, our fee is $600 for the first property.
There will be an additional fee of $100 (including GST) for each additional rental property.
This fee also includes the preparation of the required minutes and resolutions.
By the way, the minutes are now becoming important as Companies Office staff are now focusing their attention on smaller companies owned by non-residents (including ex-pat Kiwis). Those things you never worried about when preparing your tax returns in New Zealand now need worrying about!
There can often be a tax advantage when income is allocated to a shareholder. There will also be certain rules that need to be followed to achieve the benefits of the tax advantage.
This fee includes preparing a New Zealand Income Tax Return to record the allocation of income to one shareholder (providing this is the only New Zealand sourced income for that shareholder).
We can prepare New Zealand Income Tax Returns for other shareholders for a fee of just $55 (including GST) per tax return providing the rental income is the only income to be included.
Questions about New Zealand Tax?
Our New Zealand expert, Mike Reddy, is a New Zealand accountant and NZ-registered tax agent based in Sydney. He works with individuals throughout Australia to help take care of your New Zealand Tax questions and Returns from our Sydney-based office.
Having been preparing and filing New Zealand tax returns and claiming tax refunds since 1994, Mike is the most experienced New Zealand tax agent in Australia. He is regularly engaged by Australian tax agents and accountants who have clients with New Zealand interests.
So when it comes to looking after your New Zealand affairs, Mike can definitely help you with the right advice.
Call us now on 1300 791 600. There is no charge for a quick chat so we can talk you through the issues.