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  1. #1

    Default Deductible rental expense

    I want to know if I am renting out my house and rent an apartment to live instead. Can I claim the apartment rental expense against the rental income received from the house (assuming the rent from the house is higher than the apartment rental)?
    Technically I would not have that apartment rental expense if I continue to stay in my house. The apartment rental expense incurred is to derive the rental income from the house ie if there is no apartment rental expense then no house rental income received.
    I hope someone can shred some lights on this.

  2. #2
    Join Date
    May 2004
    Posts
    2,762

    Default

    No. Good thinking though!

  3. #3
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,896

    Default

    Buy one and rent it out to a friend.
    Get the friend to buy one and rent it out to you.
    All nice & legal like.
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

  4. #4

    Default

    Quote Originally Posted by PC View Post
    Buy one and rent it out to a friend.
    Get the friend to buy one and rent it out to you.
    All nice & legal like.
    +1
    Thank you for the information

  5. #5

    Default

    My understanding (not an accountant)

    Your own and family rent is treated the same as your own home mortgage, post tax money.

    You have a rental that costs $200 per week, you earn $200 per week and elsewhere you rent a place for $200 per week. You can't claim that as a $200 per week net loss. The $200 you pay in rent is post-tax.

    If you and your friend rent each other's houses, you have the same again. You both net out to $0 on your rental ownership and pay $200 in post-tax to rent where you live.

    I think there are some exemptions if you need to rent another location for business purposes but I am sure the IRD would look at that. Fringe benefit tax?
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  6. #6
    Join Date
    Nov 2006
    Location
    Cyberspace
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    Default

    Quote Originally Posted by PC View Post
    All nice & legal like.
    Associated persons and tainting?

  7. #7
    Join Date
    Feb 2015
    Posts
    365

    Default

    Quote Originally Posted by Keys View Post
    Associated persons and tainting?
    Not to mention headaches and possibly loss of friendship.

  8. #8
    Join Date
    May 2008
    Posts
    3,533

    Default

    Quote Originally Posted by PC View Post
    Buy one and rent it out to a friend.
    Get the friend to buy one and rent it out to you.
    All nice & legal like.
    I came across this some time ago and believe it's legal and above board.
    It's a way to make your mortgage deductible.
    However, ring-fencing might stop that in the future.
    Ignore the rent part - that's a zero sum game.


 

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