What can I claim for : Office space/power/internet etc

[Fresh Start]

I am looking after a couple of flats.
What expenses can I claim back for as cost for running the flats?

Power?
Internet?
Phone?

Any help and direction would be much appreciated.

[Perry]

It depends what are expenses you pay
and those which the tenants pay for.

Expenses incurred in generating a taxable
income are generally deductible.

[Rosco]

Hi Fresh Start,

If you pay the power, internet and phone for the rental property (and fully rent it out), then you will be able to claim these as costs.

The difficulty with this kind of property is how do you keep the power under control, and not let it skyrocket over winter.

Ross

[Maccachic]

Think the poster is wanting to claim his home office for being essentially a PM for the property?

[Wayne]

Think the poster is wanting to claim his home office for being essentially a PM for the property?

I would suspect the same.
Claim what seems reasonable.
I property and claiming half the house you live in might not seem reasonable to the IRD - if they audit.

[Perry]

If it is indeed a home office claim,
I dimly recall that there are IRD
guidelines on what be claimed.

[Rosco]

Home office deductions are normally based on area used

So area of office divided by total area of house.

So say 10 sqm office, maybe used 50%?? for the rental business = 5 sqm business use divided by 200 sqm house gives 2.5% home office %.

You can then claim this percentage of your home power, rates, insurance, interest, repairs, security etc

Just make sure you are realistic.

If you have an office used solely for the rental business, then you could claim the whole area of the office. But realistically property investors also use an office for their job, personal use, children's personal use!

Ross

[Perry]

If you have an office used solely for the rental business, then you could claim the
whole area of the office. But realistically property investors also use an office for
their job, personal use, children's personal use!

And I'm sure Ross uses the office phone to call home - every now and then!

I suspect Ross meant business versus private use. Not just rental business versus
private use. I.e. if you were utilising the same office for other business purposes,
then the deductibility would change.

Then there's GST to consider, on those deductions. If residential rental only is all
that's involved . . . .

[Rosco]

Hi Perry,

The above comments are presuming the property investor is also an employee and no self employed with their own business. Yes deductions would change if also had a business

For home office claim for a long term hold property investor, there is generally no GST, so you would claim a portion of the GST inclusive costs.

What I was trying to get across with the comments above, is that if you use your office for your employed job, then there isn't a deduction for this office use, and you can't claim that portion of the office. As employees there is hardly any deductions.

Ross

[Fresh Start]

Great feedback everyone, thank you very much.
I take care of my parents flats who are both retired and I do the work from a room that has solely been used for the office work.
So I will contact IRD and see if they have some details on what is claimable...

[Rosco]

Hi Fresh Start,

See my above comments.

Work out the area of your total house (A)

Work out the area used for the rental business (B)

B / A = will give you business use %

Claim this % of all house costs like rates, insurance, interest, power etc

Ross

[epsomtax]

Great feedback everyone, thank you very much.
I take care of my parents flats who are both retired and I do the work from a room that has solely been used for the office work.
So I will contact IRD and see if they have some details on what is claimable...

Check out the IRD's channel on YouTube. They have some very useful videos on this subject.