Property investments are still considered worth investments in New Zealand. Rental properties give you weekly income as rent and a capital gain. The property marking has been quite hot in the past couple of years.
As per the recent article on stuff, the rental pricing is expected to continue increasing. Northshore in Auckland and Porirua in Wellington has the highest median rent, $650. However, as a country, New Zealand’s median rent was $560, which is 8% higher than the year before.
Median rent for the following cities
Auckland: $600
Bay of Plenty: $520
Gisborne: $570
Manawatū/Whanganui: $480
Marlborough: $485
As per New Zealand Tax laws, we have to pay Income tax on our rental Income:
How to calculate the tax on rental income: Gross rental income – allowable expenses = Net Income, and then we pay tax on rental income.
Gross Income: Let’s say our weekly rent on the rental property is $600, and we had our property occupied for 48 weeks in the last financial year. So our gross income would be $28800.
Allowable expenses: We can deduct almost all the costs made to earn the rental income. So common examples are Rates on the rental property, Insurance on the rental property, Mortgage repayment insurance for the mortgage on the rental property, Agent’s fee to collect the rent and maintain the property, Property and Investments Magazines and Seminars, Property inspection expenses, Preparing tenancy agreement, legal fee, etc.
After deducting all the expenses, we can figure your net income and then, based on all your other gains, we can find out your total taxable income and based on tax credits we need to pay or are eligible to refund.
If you have still have any further doubts, please let us know, and we can chat from there.
