Yet another IR23BS question

[shahil.nazia]

Hi,
I have just settled on my first rental property under my LAQC and its slightly pre-tax negative for a few years. I scoured through the forum thread but could not find conclusive answers to these questions:

a) Can I file the IR23BS form with IRD right away and start receiving my tax losses immediately?

i)If YES, then on the IR23BS 2007 form located on http://www.ird.govt.nz/resources/fil...r23bs-2007.pdf
and under section 8 where it says TYPE OF INCOME, what figure do I put in? Would it be estimated annual rent collected for the oncoming year?

ii) If the answer to (a) is NO, then when can I file the IR23BS form?

b) My understanding is that a company has to register for GST if annual income (from rentals) exceed 40 K, which I take to mean that almost every B&H property would need a separate LAQC rite (since gst on rent is a NO NO, please correct me if im wrong on this one)?

i)) If YES, what about properties fetching more than 40 K in rent annually? I suppose the question then is to as whether rental income is zero-rated?

All help would be appreciated,
Shahil

[Jumpin]

Shahil,
Talk to your accountant. It really isnt worth doing this by yourself. If you are just doing B&H, get a cheap accountant, you dont need an expensive expert in trading. I'll PM you with a cheap but knowledgeable accountant if you want (ex-IRD). (Brooklyn). One of the many advantages is that she will save you money, get your return processed quickly, and will not have your figures questioned by ird as undoubtedly will happen if you file your own return.
She was excellent for me over the last few years, but now I am setting up for trading/LO etc I have had to upgrade to a more expensive accountant.
My understanding is that Rent from B&H does not attract GST. You dont need to register for GST unless your property is a serviced apartment, or if you are trading or you are running a hotel/motel/boarding house maybe.
You can file your IR23BS any time and get rebates monthly I think.
Cheers Tim

[Rolf]

Yes you can claim straight away, you just fill out the form with your estimated figures for the current year.
If there is a discrepancy at the end of the year, then you will lhave to pay extra tax, or you get a refund back.

In section 8 I write 'Loss from rental properties' or something similar, and the figure is NOT your total rental income but your net result - in your case the expected total loss for the year.

[David_W]

In relation to limb (b) of your question Shahil, residential rental income is exempt under section 14(c) of the Goods and Services Tax Act 1985:

14. Exempt supplies---The following supplies of goods and services shall be exempt from tax:

(c) The supply of any accommodation in any dwelling by way of hire {hire = rental}

So no GST on residential rents. Even if you had $400,000,000 of rental income annually