The boarder line - when is rental income not taxable?

Small wooden block shaped like house in foreground, with more small wooden houses blurred in background

If you receive income, you must pay tax. So if you have rental income, you have to pay tax on it, right? Maybe, maybe not – if you receive rent from boarders.

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Rental property insulation grants

Recent changes to the Residential Tenancies Act mean that all rental properties will be required to have underfloor and ceiling insulation, where it can be practically installed, by 1 July 2019.

There are currently grants available for insulating rental properties occupied by low-income tenants, however these grants are limited so you will need to act fast.  

To find out if your rental property is eligible for this funding visit the EECA energywise website on the link below:

www.energywise.govt.nz

Commercial property update

Commercial property yields are currently about 1.5 percentage points above bank rates, making investing in commercial property attractive to investors. There is a strong occupier demand in Auckland and Christchurch, however many developers have chosen not to invest as the rent they would need to charge to make a return would be unaffordable to potential tenants.

 

New Zealand economy is expected to slow down in 2018, which may mean higher vacancy rates in lower grade buildings.

 

Reference:  Westpac Industry Insights June 2016

Changes to the Residential Tenancy Act (RTA)

Changes to the RTA aim to reduce fire-related injuries and deaths and to make homes warmer, drier and safer for the million New Zealanders who live in rental accommodation.

Some of the proposed changes are:

Smoke Alarms

  • From 1 July residential rental homes will need to have working smoke alarms installed. Any replacement alarms installed after that date will need to have long life batteries and a photoelectric sensor. Hardwired smoke alarms are also permitted.
  • Tenants will be responsible for replacing worn-out batteries in the smoke alarms and informing their landlords of any defects.

Insulation

  • All residential rental homes in New Zealand will be required to have insulation. Social housing (where tenants pay an income related rent) must be insulated by 1 July 2016 and all other rental homes by July 2019.

Landlords will be required to provide a statement on the tenancy agreement about the location, type and condition of insulation in the rental home.

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