Skip to main content

2023 Income tax assessments | From now until the end of July we’re issuing income tax assessments. Most people will receive theirs by 10 June. Timelines at the end of the tax year.

Inland Revenue Inland Revenue
  • About us
    • About us
    • IR careers
  • News
    • Media releases
    • Updates
    • Subscribe
    • Seminars
  • Related Websites
    • Tax Technical
    • Tax Policy
    • International
  • Contact us
    • Contact us
    • Media queries
    • Tax Technical queries
    • Tax Policy queries
  • English
Register myIR login
myIR login
Individuals and families Ngā tāngata me ngā whānau
  • IRD numbers Ngā tau IRD
  • Income tax for individuals Te tāke moni whiwhi mō ngā tāngata takitahi
  • File my individual tax return Te tuku i tētahi puka tāke takitahi
  • Support for families Ngā tautoko i ngā whānau
  • KiwiSaver Poua he Oranga
  • Student loans Student loans
  • Self-employed Mahi ā-kiri
  • More... Tāpiri atu…
Business and organisations Ngā pakihi me ngā whakahaere
  • Income tax Tāke moni whiwhi mō ngā pakihi
  • Employing staff Te tuku mahi ki ngā kaimahi
  • KiwiSaver for employers Te KiwiSaver mō ngā kaituku mahi
  • Goods and services tax (GST) Tāke mō ngā rawa me ngā ratonga
  • Non-profits and charities Ngā umanga kore-huamoni me ngā umanga aroha
  • International Tāwāhi
  • More... Tāpiri atu…
Intermediaries and others Ngā takawaenga me ētahi atu
  • Tax agents Ngā māngai tāke
  • Bookkeepers Te kaikaute
  • PAYE intermediaries Ngā takawaenga PAYE
  • Payroll bureaus Ngā tari utu ā-rārangi
  • Digital service providers Ngā kaiwhakarato pūmanawa rorohiko
  • More... Tāpiri atu…
About us
  • About us
  • IR careers
News
  • Media releases
  • Updates
  • Subscribe
  • Seminars
Related Websites
  • Tax Technical
  • Tax Policy
  • International
Contact us
  • Contact us
  • Media queries
  • Tax Technical queries
  • Tax Policy queries
English
Register
myIR login
Inland Revenue
Home
Individuals and families Ngā tāngata me ngā whānau
Popular pages Ngā wharangi rongonui
Cost of Living Payment Utu mō te utu oranga IRD numbers Ngā tau IRD File my individual tax return Te tuku i tētahi puka tāke takitahi Support for families Ngā tautoko i ngā whānau Managing my tax Te whakahaere i taku tāke
More individuals and families
Familes Ngā whānau
Working for Families Working for families Child support Te tautoko tamariki Paid parental leave Te utu tiaki pēpi
Property and Trusts Ngā wharangi rongonui
Trusts and estates Ngā rōpū kaitiaki me ngā rawa tuku iho Property Ngā rawa
Individuals Ngā tāngata
Income tax for individuals Te tāke moni whiwhi mō ngā tāngata takitahi Non-residents Ngā kainoho-tāwāhi Self-employed Mahi ā-kiri Kiwisaver for individuals Kiwisaver mā te tangata takitahi Student loans Ngā pūtea taurewa ākonga Cryptoassets for individuals Ngā rawa whiti-rangi mā te tangata takitahi Unclaimed money
Situations Ngā āhuatanga
I am going overseas Kei te haere ahau ki tāwāhi I received an income tax assessment I whiwhi i ahau tētahi aromatawai tāke moni whiwhi I'm struggling to file and pay my tax
More situations
Business and organisations Ngā pakihi me ngā whakahaere
Popular pages Ngā wharangi rongonui
Covid-19 Businesses and organisations KOWHEORI-19 Ngā pakihi me ngā whakahaere File a companies income tax return - IR4 Te tuku i tētahi puka tāke moni whiwhi kamupene - IR4 Not-for-profits and charities PAYE calculator to work out salary and wage deductions Property Ngā rawa IRD numbers Ngā tau IRD
More business and organisations
Income tax Te tāke moni whiwhi
Types of business income Ngā momo moni whiwhi pakihi Tax rates for businesses Ngā pāpātanga tāke mō te pakihi Balance dates Ngā rā mutunga tau pūtea
GST Tāke hokohoko (GST)
Charging GST Te uta i te tāke hokohoko Claiming GST Te kerēme tāke hokohoko
Employing staff Te tuku mahi ki ngā kaimahi
Register as an employer Te rēhita hei kaituku mahi Paying staff Utu kaimahi Payday filing Te tāpaetanga rā utu Deductions from income Ngā tangohanga mai i ngā moni whiwhi Kiwisaver for employers Te KiwiSaver mō ngā kaituku mahi
International Tāwāhi
International tax for business Te tāke aowhānui mō ngā pakihi
Situations Ngā āhuatanga
I am starting a new business Kei te tīmata au i tētahi pakihi hou I am going to employ someone Kei te tuku mahi ahau ki tētahi tangata My business is making a loss Kei te hapa taku pakihi
More situations
Intermediaries and others Ngā takawaenga me ētahi atu
Intermediaries Ngā takawaenga
Becoming an intermediary Te tū hei takawaenga Getting authority to act Te whiwhi whakamanatanga Executive office holders Ngā kaipupuri tūnga whakahaere Linking client accounts Te honohono pūkete kiritaki Nominated person Te tangata kua whakaingoatia Tax pooling Te whakarōpū tāke Gateway services
More intermediaries and others
Tax agents Ngā māngai tāke
Agents answers Ngā Whakautu Māngai Tax agent status Te tūnga māngai tāke Extension of time arrangements Te whakaroa i ngā whakaritenga wā Managing consolidated groups Te whakahaere rōpū tōpū Income tax for individual clients of tax agents Te tāke moni whiwhi mā ngā kiritaki takitahi a ngā takawaenga News updates for tax agents
More tax agents
Digital service providers Ngā kaiwhakarato ratonga matihiko
Getting started guide About the developer portal Mō te tomokanga kaiwhakawhanake Gateway services architecture Te hanganga ratonga tomokanga Services catalogue Te putumōhio ratonga
More digital service providers
Roles Ngā tūranga
Tax agents Ngā māngai tāke Bookkeepers Ngā kaikaute PAYE intermediaries Ngā takawaenga PAYE Payroll bureaus Ngā tari ripanga utu kaimahi Other representatives Ētahi atu māngai
Search tips

Rollover relief

Renting out residential property
Renting out residential property
  • Residential rental income and paying tax on it
    • Property interest limitation rules
      • Properties excluded from the interest limitation rules
      • Exemptions from the interest limitation rules
      • How the rules work for different entities
      • How interest deductions are affected
      • Interest deductions on the sale of property
      • Rollover relief
      • Completing your income tax return for interest limitation

Rollover relief allows you to change the  legal ownership of property after 27 March 2021 while allowing you to deduct a portion of your interest expense during the interest phase-out period.  

Rollover relief applies for interest limitation purposes when residential property is transferred as follows:

  • under a settlement of relationship property
  • as part of a company amalgamation that qualifies as a resident’s restricted amalgamation
  • after the death of the owner of the property, to an executor or administrator of the estate or to a beneficiary of the estate.
  • in some cases to or from look-through companies and partnerships
  • in some cases to or from family trusts

Specific relief also applies for certain transfers of land subject to the Te Ture Whenua Māori Act 1993.

Look-through companies (LTCs) and partnerships

Rollover relief applies in certain circumstances to transfers to or from LTCs and partnerships.

It applies for a person who is a shareholder in the LTC or a partner in the partnership, to the extent they have the same ownership interest before and after the transfer.  

Family trust

Rollover relief applies for transfers of residential property to or from family trusts, provided the following apply:

  • each transferor (in the case of transfers to a trust) or each transferee (in the case of transfers from a trust) of the residential property is also a beneficiary of the trust
  • all principal settlors are beneficiaries of the trust
  • each beneficiary is either a principal settlor, has a family connection with a principal settlor, or is a company controlled by a family member beneficiary or is a charity. 

Also, when the trustees of a family trust transfer the property back to the settlors who first transferred the property to the trust, each recipient’s proportionate interest in the property must be the same as what was held before the property was transferred to the trust.

Rollover relief may apply to a transfer from the trustees of a qualifying family trust to the settlors, even if the settlors did not previously transfer the property to the trust, but the trustees instead acquired the property from a third party. In this case for rollover relief to apply all the settlors receiving the property from the trustees must have been principal settlors of the trust both at the time the trustees acquired the property and when the trustees transferred the property to them.

If certain criteria are met, rollover relief also applies when residential property held in a qualifying family trust is resettled onto another family trust.

Rollover relief does not apply when you transfer shares in an LTC to a trust.

Māori authority or Māori family trust 

Rollover relief is available for a transfer of residential property to a Māori authority, or person eligible to be a Māori authority, as the trustee of a trust if the following apply:

  • the residential property is subject to Te Ture Whenua Māori Act 1993
  • each transferor is both a settlor and beneficiary of the trust
  • the transferors of the residential property and the beneficiaries of the trust are all either members of the same iwi or hapū or the descendants of the same tipuna (living or dead).

Also, when the trustees of a trust transfer property that comes under Te Ture Whenua Māori Act 1993 back to the persons who first transferred the property to the trust, each recipient’s proportionate interest in the property must be the same as what was held before the property was transferred to the trust.

Example: Mary and Bob sell their property to their LTC

Mary and Bob, a married couple, are the shareholders in a look-through company, Company A. Mary and Bob jointly own an investment property in equal shares (50:50). They each hold 50 percent of the shares in Company A. Mary and Bob had drawn down a loan in 2018 to purchase the property. In September 2021, the loan has an outstanding balance of $100,000.

In September 2021, Mary and Bob sell the property to Company A. Company A borrows $150,000 from the bank for the purchase of the property and uses its equity to fund the remainder of the purchase price. Partial rollover relief applies to the transfer of the property, meaning that Company A can deduct the interest on a loan balance of $100,000 (being the amount of Mary and Bob's original loan balance on the date of the transfer) subject to phasing until 31 March 2025. Company A’s excess loan balance of $50,000 does not qualify for rollover relief.

Example: Neo sells his property to his family trust

Neo acquired a rental property and drew down a loan of $500,000 for the property on 3 March 2017. On 29 October 2022, Neo sells the property to his family trust. He and his son, Archie, are beneficiaries of the trust. The outstanding balance of Neo’s loan is $400,000. The trustee takes out a loan of $450,000 to purchase the property from Neo. Neo uses $400,000 of the sale proceeds to repay the outstanding balance of his loan.

The transfer of the property to the trust qualifies for partial rollover relief and therefore enables the trustee to deduct limited interest deductions until 31 March 2025. However, only interest on $400,000 of the trustee’s loan is deductible (being the amount of Neo's loan balance on the date of the transfer). Interest on the additional $50,000 borrowed does not qualify for rollover relief and is not deductible.


    Was this page helpful?

    What did you like about this page?

    Please tell us how we could improve this page?

    Thanks for sharing your opinion! Your feedback has been received.

    Sorry there was an issue submitting your feedback, please try again later.

    Moving between Inland Revenue sites

    picto--truck

    Heads up. We're taking you to our old site, where the page you asked for still lives

    Continue to old site
    Last updated: 17 Mar 2022
    Jump back to the top of the page top
    Inland Revenue Inland Revenue

    FOLLOW US

    • Facebook
    • Twitter
    • Youtube
    • LinkedIn
    • Subscribe

    CONTACT US

    • Contact Information
      • Contact us
      • Media queries
      • Tax Policy enquiries
      • Tax Technical enquiries
    • About us
    • Careers
    • International

    SHARE THIS PAGE

    • Email this page
    • Linkedin
    • Facebook
    • Twitter

    SHARE THIS PAGE

    • About the site
    • Conditions of use
    • Privacy
    • Glossary
    • Accessibility
    • Copyright
    • MyIR Help
    © Copyright 2023 Inland Revenue
    New Zealand Government
    Shielded website