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Tax deduction for residential with business use

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  • Tax deduction for residential with business use

    Hi everyone,

    Wonder if someone comes across this and can give some advice:

    I have a residential tenant who uses part of the property (garage) as a storage space for their material and gear for their private business.

    So my questions are:
    1. Can I consider the interest (in a proportion based on the area of the garage over the overall house) as an expense?
    2. Any reference on IRD how the tax deduction rule should be applied for this scenario?
    3. Will that affect my premium of the insurance for the my rental? Should the tenant be responsible for the addition of the premium?

    Thanks and appreciate your advice.

    Eddie


  • #2
    Seems fair enough. Would strengthen the case if you charged a separate rent for the garage
    Doug

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    • #3
      That may be a sticky one. Did you stipulate the garage is for vehicle storage residential purposes ONLY in your TA? May be worth checking out ......

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      • #4
        The insurance may be affected though not sure how as the garage is used for storage not for conducting business as I understand. But what is being stored? Is there any dangerous chemicals? The devil is in the detail.

        cheers

        Donna
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