Newbie having to fill in IR3 (& IR3R) for rental income

[tabinoke]

Thanks everyone for all your help and advice, including the driving and existential ones!

I think I've got everything that I need to know now, but of course if anyone else wants to add more, please go ahead! We can never stop learning

Cheers once more for sharing all your knowledge!

[sidinz]

Even if you don't take on an accountant permanently, or to do your returns, it is worthwhile paying one for an hour or so of his/her time in order to clarify things/get educated.

[Rosco]

Even if you don't take on an accountant permanently, or to do your returns, it is worthwhile paying one for an hour or so of his/her time in order to clarify things/get educated.

I would second that. It would be worth you gaining more knowledge!

[JM126]

Some really basic notes to help you complete IR3 (as stated above you would include 50% in each person's tax return)
- obviously you return all the rent you receive up to 31/3/15. If you received March rent on say 1/4/15 from your property manager, this is also rent in the 31/3/15 year. Generally the rent you received will match to the summary your property manager gave you

- Interest, make sure you only claim interest and no principal. Your bank should have given you an annual summary
- You can claim property management including the GST portion, and repairs (see notes below) they pay on your behalf
- Make sure repairs are repairs. So if you painted or fixed something within the first 6 months this is most likely a cost of buying and not a repair
- After the initial period of 6 months, any asset under $500 can still be a repair, as long as not purchased with other assets
- presume rent is just going into your private bank account, so claim maybe 1/3rd of bank fees
- Claim insurance
- claim legal fees for purchase, plus any rates paid
- claim rates
- if you received a bank contribution to your legal fees, this will be income.

Good luck

Ross

Hi Ross

I've been reading up on these forums and these is so much helpful advice - just a quick question re legal fees - the IR264 guide say legal fees for buying the property are a non-deductible expense - is that correct or can they be deducted?

We've brought our first investment property and at this stage I'm hoping to do the accounts for it myself but using the IRD guides - but we'll see how that goes...

Thanks,

[Anthonyacat]

I haven't read the IR264 in a while, but it may be out of date.

A new section was added to the Income Tax Act when it was last rewritten in 2007. I think it was DB62, or DB65. This allows you to deduct legal expenditure without worrying about whether it is for a Capital purpose (such as buying an asset) so long as total legals during the year are under $10,000.

[JM126]

Thank you for clearing that up for me Anthony, I was beginning to get quite confused.