Tax on rental income is usually paid by the person getting the rental income. It's usually the property owner. They're the ones who file the tax return.
Residential rental property owned in a partnership
If you own rental property in a partnership with one or more people you'll:
- need to get a partnership IRD number
- file a partnership return
- file an individual tax return for your share of the rental income.
If you're married, in a civil union or de facto relationship:
- do not get a partnership IRD number
- do not file a partnership tax return
- each of you files an individual tax return for their share of the rental income
- each of you includes a copy of the rental accounts in their individual tax return.
Rental income and tax residency
New Zealand tax residents also have to pay tax on rental income from their overseas rental properties.
If you go overseas to live, you’ll still have to pay tax in New Zealand on the rental income from your New Zealand property. You'll have to do this even when you stop being a New Zealand tax resident.
New and returning tax residents
If you're a new tax residents, or returning to New Zealand after 10 years, you’re a transitional tax resident. As a transitional tax resident you may be eligible for a tax exemption.
The exemption means you do not pay tax on most types of overseas income for 4 years. This includes your overseas rental income.
When you're a non-resident of New Zealand you'll have to pay tax on any income you get from New Zealand. This includes rental income from your New Zealand property.
If New Zealand has a double tax agreement (DTA) with the other country or territory taxing the same income, it may affect how that income is taxed. Each DTA is different, so you'll need to check to be sure how it applies or consult a tax professional.
Tax by residential property types
What tax you pay on your rental income depends on the type of property and rental situation.
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