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Tax and property - ring-fencing rental losses

June 28th, 2021

Michelle Thompson, CA, Head of Tax & Compliance

If you earn income from rental property, be aware that new rules were introduced for the tax treatment of rental losses, applying from 1 April 2019 (for standard balance date taxpayers) for the 2019/20 and later income years. This affects your tax position.

For rental properties that make losses, owners can no longer offset those losses against other sources of income such as salary or wages.

However, owners can carry those losses forward and use them against future income or profits from that property.

If you own more than one rental property, you can choose to offset deductions for a specific rental property against income from other rental properties in your portfolio, essentially calculating your overall profit or loss across your portfolio. Or you can elect to use a property-by-property basis.

The rules are complex. Call us for a chat if you'd like to know more.

Check out our Accounting Services

Michelle Thompson, CA

Head of Tax & Compliance

Ph: 09 366 6005

Email Michelle Thompson

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