Short Term Residential Rentals

If you rent out a room, caravan or sleep-out, even if its just for a few days, this is income and must be declared. There are some exceptions to the rules around short term residential rentals if you are renting out your holiday home that you also use yourself.

For example if your holiday home qualifies as a mixed use asset, and you earn less than $4,000 per year from renting it out, you don’t need to include this income in your tax return. However, if you are not including the income, you cannot include the expenses either.

Income earned that is not from a mixed use asset, will need to be incluede in an IR3 (Individual) tax return.

You should also note that you are able to claim expenses for the time of the rental – for example, rates, cleaning etc however these expenses will need to be apportioned accordingly.

You can read more about the general rules on the Ministry of Business, Innovation and Employment website here

If you’d like further help to assess your tax position, get in touch. We’d be happy to assist.