By Trish Willis | Member of the Property Institute of NZ (IPAC)
Tax On Rental Income

Property investor tax advice in a nutshell - includes definitions, tax laws and obligations, expenses you can claim and tax payable when buying or selling a family home.

Know IRD's tax definitions

If you own rental property the tax you should pay will depend on whether you are a residential rental investor or a dealer in residential rental properties according to the Inland Revenue Department.

Rental property investors - buy property and use it to generate on-going rental income, without any firm intent of resale. Investors pay income tax on their net rental income but generally not on the eventual sale proceeds of the property.

Property speculators - buy a property always intending to sell it. Property dealers have established a regular pattern of buying and selling property. Both speculators and dealers must pay income tax on any gain they make from reselling property, if their property fails the bright line test, even if they rented it out before it was sold says IRD.

Planning to sell your investment property? Find a vetted real estate agent you can rely on.


From July 1, 2024 the bright-line property rule is changing. If you sell a property on or after July 1, 2024 the bright-line property rule will only apply if the property is sold within 2 years of purchasing it.

NB: If you sell a property before 1 July 2024 the current bright-line periods still apply.


Changes to interest deductibility rules. The changes are happening in two phases: From April 1 2024, you can claim a deduction for 80% of the interest on funds borrowed for the residential property. From April 1, 2025, you'll be able to claim 100% of the interest deduction instead of 80%.

Know your landlord obligations under February 2021 changes to the Residential Tenancies Act.

NITTY GRITTY on IRD RULES for investors

Taxes On Rental Income

The IRD website provides the most reliable source of tax related information for property investors and landlords.

Before buying another residential investment property, read up on IRD's information about investment property tax laws.

Check out the online property tax decision tool, to help you work out if the property you are buying or selling is taxable under any of the property rules.

Property Tax Information Nz

Find a rental tax accountant

Some people who provide tax services are not licensed accountants so be careful who you hire.

If you don't already have a tax accountant, the NZ Institute of Chartered Accountants has a database. Just choose your location.

Find out about tax when buying or selling your family home, not an investment property.

Find out about selling an investment property

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Page updated 20 June, 2024 by Trish Willis | Member of Property Institute of NZ (IPAC)

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Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

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