Holiday rentals

[casacamo]

Can anyone tell me about the rules for holiday home rentals.

Are the costs tax deductable for the period it is AVAILIABLE for rent
or only for the period it is ACTUALLY tenanted.

ie: A house could be available for rent 75% of the year
but only actually tenanted 25 - 50% which may vary from year to year.

[Tan]

The IRD's "clarification" confirms the approach taken by many bach owners of deducting expenses according to the number of weeks the property is available for rent.

From http://www.bookabach.co.nz/bachchat/...-as-a-business

See link for more detail.

[casacamo]

Thanks Tan,

Now I have to work out how to keep family & friends away to maximise the rental

[Tan]

Charge them

[eri]

good joke along the lines of that

a man has a just bought a beautiful place on the beach and is getting sick of all his friends and relatives dropping in unexpectedly and expecting to stay the night, esp. if the weather is good

he bitches about it to his neightbour

neighhbour laughs, and says

"do what i did, borrow money off the rich ones and lend it to the poor ones

in no time at all

both will avoid you"

[Rosco]

Hi Casacamo,

It really depends on what kind of property it is

a) really a private house, that you rent out now and again to get some cash
b) really a rental property, that you use occassionally for private.

If property a, be very careful. Most likely this is a private house and therefore bascially NO deductions available.

If property b, then just need to make sure you have good records of when the property is availalbe to rent. Make sure it is well advertised. I agree with tan, and charge them!

Ross

[essence]

See if you can get your hands on the February 2010 issue of the NZ Property Investors Magazine, there's an article on page 42 by Mark Withers.

"Holiday Houses Income Tax Treatment" - well worth a read.

[muppet]

Also an article about the timber towns of Kawerau and Tokoroa.

It is Wayne Dickson not Wayne Dickenson whom keeps being quoted in the article about Tokoroa.

[CJ]

If it is a holiday rental but you use it in all the peak earning periods - NY and long weekends - then further adjustment may need to be made.

[kolzee]

If property b, then just need to make sure you have good records of when the property is availalbe to rent. Make sure it is well advertised.

Can't stress this enough - advertising is the big test!! Hard to justify being 'available to rent' when not advertised like many!!