New Zealanders with Property Overseas.
If you’re a New Zealand tax resident, your total income includes rental income from properties in other countries. You can claim for expenses related to your offshore rental income, and you may receive credit for overseas tax paid on the rental income you have received.
Income from offshore property rental is liable for income tax in New Zealand, and New Zealand tax residents must include this income in their tax return, including income from renting out land or buildings, or income earned from having tenants or flatmates living in your offshore property.
If you are a New Zealand tax resident with a mortgage on an offshore property, with an offshore bank, you may need to deduct Non-Resident Withholding Tax (NRWT) from any interest payments made, and pay this to Inland Revenue. This situation is most common in New Zealand tax residents who own rental property in the United Kingdom.
NRWT does not apply to a New Zealand mortgage on an Australian property. It also doesn’t apply, in some circumstances, to mortgages held by banks in countries that have a Double Tax Agreement with New Zealand.
We can help our clients meet their obligations with offshore rental properties as part of our fixed fee service. If you aren’t sure which rules apply to you, contact us for guidance.
In situations where NRWT applies to the interest payments made we can register you for Approved Issuer Levy (AIL) which means you will only have to pay 2% instead of 10% or more.
AIL registrations cannot be backdated. If you think this situation applies to you, please contact us now.
Foreign Residents with Property in New Zealand.
If you are a tax resident of a country other than New Zealand, and you own a rental property in New Zealand, you are required to file an annual Income Tax return with Inland Revenue to account for the income or loss from your New Zealand property.
Depending on the tax laws in your current country of residence, you may also have to return the income or loss in your Income Tax return in your home country. Usually, a tax credit for any tax paid in New Zealand is applicable.
Property Tax Returns offers a quick, easy and affordable way to meet your rental property tax obligations for properties owned in New Zealand and overseas.
If we can help you with your rental property tax, please contact us.