depreciation when renting own personal home

[confusedkiwi]

have shifted to aus 10 months ago and rented out the house, trying to work out if to claim depreciation on the house or not, eg well it bite me latter, property was pruchased 8 years ago before the boom so value now is alot more than back then but understand deprication is done on purchase price, not sure if i'm going to shift back to nz to live in it or not

[CJ]

not sure if i'm going to shift back to nz to live in it or not

This is the key. Without knowing this it is hard to give you advice.

Basically, if you move back into property, you may have to pay back any deprecaition claimed. This will recover all years depreciation in 1 go which may put you up a tax bracket (or 2).

[confusedkiwi]

so basically i would end up with some interest free monies from ird, noticed a comment that some times the wear and tear on house can compensate for depreciation on house, since i know tennants thinking i should have just said they were boarders and it would have been tax free i think

[Re@der]

You don't repay depreciation you repay tax on that depreciation at your current rate.

[Wayne]

If you don't claim depreciation and don't get 'permission' from IRD to not claim depreciation then IRD will assume depreciation has been claimed and claw back the tax anyway so make sure you either claim depreciation or advise the IRD that you aren't.