Home Office Expenses
Are you legitimately using part of your own home to run your rental business? If so, you can make a claim on some of your personal expenditure as a home office expense.
It’ s a simple calculation based on the proportion of your home used as a home office. Start by adding up the personal expenditure on your own home, e. g. rent or mortgage interest, rates, insurance for the year etc.
Work out the floor area of your home in square metres, as well as the area of this total that is occupied by your home office. Finally, divide the home office area by the total floor area. This is the percentage of your home expenses that can be claimed and offset against your rental income.
SQUARE METRE RATE OPTION the IRD sets each year based on the average cost of utilities per square metre of housing for the average New Zealand household, which is then applied to the floor area size of your home office.
This rate does not include premises costs of mortgage interest, rates or rent, and you can also claim a portion of these based on the percentage of floor area used.
Be sure that you are actually using this space as intended. The IRD are known to conduct home office inspections at random.
Instead of working out how much of your household expenses will be claimed, you can opt for the square metre rate option. This uses a rate
INVESTMENT INFORMATION GUIDE 19