Income to declare?

[mrDOitYOURSELF]

Hi there,
I was wondering weather I will need to declare income from boarders who stay at my place? I receive 500 weekly from my flatmates, would I need to declare that? Also does that mean I file an IR3 as of next year?

[Anthonyacat]

There is a distinct difference in IRD's eyes between boarders and flatmates. They do not specify what the distinction is, but flatmates you pay income tax on from the first $1, while boarders get an exemption. From memory this is around $250/week per boarder for the first 2, then around $200 for #3 & 4. Beyond that you have to declare everything (but can deduct relevant expenses)

If you have boarders, and they pay less than the threshold, you don't need to declare it. But best to keep good records anyway in case IRD comes in later and calls them flatmates.

See: http://www.ird.govt.nz/income-tax-in...ers-flyer.html for more information.

[spaceman]

Not sure ...BUT.... I thought the distinction was meals/power/laundry etc were all provided at a set price. Where as flatmates share expenses.

There were a few threads a few years back about this, though I can't remember if there was a hard and fast conclusion or not.

Cheers
Spaceman

[Anthonyacat]

There were no final conclusions from memory, but that is certainly one opinion. Personally I believe you can have board without food, but if people are paying shares of every expense as it comes in they're leaning on the side of flatmates rather than boarders. A set price certainly helps.

[Wayne]

have a read of this thread

http://www.propertytalk.com/forum/showthread.php?29072-The-line-between-boarders-and-flatmates

there is a quote from somewhere in post 9 with a definition

This may be helpful

http://www.ird.govt.nz/income-tax-individual/different-income-taxed/rental-income/boarders/incometax-boarders-flyer.html

[Rosco]

Hi there,
I was wondering weather I will need to declare income from boarders who stay at my place? I receive 500 weekly from my flatmates, would I need to declare that? Also does that mean I file an IR3 as of next year?

If they are flatmates, then yes you need to return the rental income. You can then claim a portion of the expenses such as interest, rates etc.

Yes you would need to file an IR3.

A boarder pays a set amount, ie $250 per weeks, for the room, power, phone, internet, food. So basically everything included.

A flatmate pays a set amount for the room, say $150. Then a share of power, phone, internet and normally there own food, or could be a share of the combined food.

Ross