Paying tax on our New Zealand rental property and paying a NZ mortgage
We are moving to the Gold Coast in a couple of months. We own a house in NZ (with a Mortgage) and have decided to get tenants in as it’s not a good time to sell. On top of the rental we will receive, we will still have to top up our NZ mortgage about $200 NZD per week. We are worried about whether we will have to pay NZ tax on the rental income we receive (even though it's going straight to the mortgage!). Is there anyone else in this situation, or anyone who has been in this situation that knows the answer? Thanks. 20 April 2010.
The interest IS tax deductible - any principle repaid should be with tax paid dollars.
For one property at this level and with repairs and maintenance you would probably be creating a loss every year.
If you aren't - increase the mortgage until you are about even - I am sure you can use the extra borrowed money for something useful in Australia.