If you own a rental in Southland the right claims can add thousands to your bottom line each year. We see smart owners miss legitimate deductions all the time, not because they are cutting corners, but because they’re busy. This guide highlights the most‑overlooked claims, with plain‑English notes on when they apply in New Zealand and when to get advice.
Property Investors Note:
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The most‑missed landlord claims in New Zealand
Depreciation on chattels - not the building
Buildings don’t depreciate for tax, but many items inside your rental do. Common examples: carpets, blinds/curtains, heat pumps, alarms and appliances, each with IRD‑set rates. If you’ve replaced or added these, check whether you can claim depreciation this year.
Low‑value assets, under $1,000 you can expense immediately
Smoke alarms, door hardware, small appliances and similar items under the $1,000 threshold can usually be written off in the year of purchase (subject to the “part of a larger asset” rule). That’s a fast, legitimate tax saving many owners miss.
Healthy Homes: what’s deductible vs capital
Meeting Healthy Homes standards often involves a mix of repairs (often deductible), minor alterations, and capital improvements (not immediately deductible). Some items may be separately depreciable (for example, certain standalone chattels), so keep invoices itemised and get tax advice if you’re unsure.
Interest deductibility
From 1 Apr 2025: you can claim 100% of interest and these rules apply regardless of when you bought the property or drew down the loan.
Mortgage setup and valuation for lending
Fees for arranging finance, application fees, legal documentation, broker fees and the valuation required to obtain the mortgage are deductible. Insurance valuations are not, your accountant can confirm whether any need to be spread over the loan term.
Advertising for tenants & tenancy‑agreement fees
Costs to advertise your rental, plus fees for drawing up the tenancy agreement, are generally deductible. Keep copies of listings/invoices.
Travel to inspect or do repairs
Travel to your rental for inspections, viewings or maintenance is deductible. If a trip is mixed half personal / half rental, only claim the rental portion - keep a logbook, itineraries and receipts.
Professional fees you might overlook
- Accounting fees for preparing rental accounts and returns are deductible.
- Property management fees are deductible - and our team supplies clean statements to make claiming easy.
We recommend working with your property accountant to pull everything together cleanly at year‑end. Our Property Management Southland team can also streamline records and compliance so your accountant’s job is simpler.
Insurance, rates & body corporate
The cost of insuring your rental and council rates are straightforward deductions. If you’re in a body corporate, many administration and maintenance charges will be deductible too, keep itemised statements.
Home‑office & admin if you actively manage yourself
If you actively manage your rentals from home, you may be able to claim a modest home‑office portion as well as part of power, internet, telephone line bills. Keep your method consistent and documented.
Timing rules and “gotchas” NZ landlords should keep in mind
- Bright‑line test: For residential property sold on or after 1 July 2024, the bright‑line period is 2 years. Hold longer than two years and (generally) your gain is outside bright‑line, but intent rules can still apply. Get advice before you sell.
- Ring‑fencing: Residential rental losses are ring‑fenced - they can’t reduce salary/wage income but can be carried forward to offset future rental profits. Plan cash flow and tax with this in mind.
- Records: Keep rental income/expense records, invoices and asset registers for 7 years (even if you sell). Good records make it easier to claim every dollar you’re entitled to.
How Todd & Co Realty helps investors keep more
- Tidy statements and inspection reports to support claims.
- Proactive rent reviews and vacancy reduction to lift cash flow.
- Healthy Homes compliance coordination to avoid penalties.
- Local, responsive property managers across Southland.
Learn more: Property Management Southland or Commercial Property Management.
Disclaimer: This information is general in nature and is not tax, legal or financial advice. Tax and property rules can change and each property owner’s situation is different. You should do your own research and seek advice from a qualified accountant or tax adviser before relying on this information.
FAQs
Q1) Can I claim interest on my rental mortgage?
Yes. You can claim 80% of interest for 1 Apr 2024 - 31 Mar 2025 and 100% from 1 Apr 2025. Ring‑fencing may still limit how much reduces your overall tax in a given year.
Q2) What’s the low‑value asset threshold?
Assets that cost $1,000 or less (ex GST if registered) can usually be expensed immediately instead of depreciated - provided they aren’t part of a larger asset.
Q3) Are travel costs to my rental deductible?
Yes - travel to inspect the property or carry out repairs is deductible. If a trip is partly private, claim only the rental portion; keep a logbook and receipts.
Q4) Can I claim Healthy Homes costs?
Some costs are immediately deductible (repairs/minor works); others are capital (depreciable if separate chattels; often non‑depreciable if part of the building). Itemise invoices and keep records.
Q5) What records do I need to keep, and for how long?
Keep rental income/expense records, invoices, asset registers and agreements for 7 years. Good documentation is key if IRD asks questions later.