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Here is another interesting Wellington real estate related news article that we thought may provide you with helpful information.
Landlords – don’t forget about the Government’s changes to the rules around the ring-fencing of rental losses as they are now in force, Inland Revenue is warning.
By The Landlord
This week Inland Revenue issued a reminder that from the 2019-2020 income year, residential property deductions can no longer be offset against other income like salary.
Deductions for residential properties are now ring-fenced so they can only be used against income from that property.
Under the new “ring-fencing” rules, landlords can only claim deductions up to the amount of income they earn from rental properties for the year.
Landlords must carry forward deductions over that amount, but they can use these deductions to offset rental income in future income years.
The rules generally apply no matter whether the property is held in a partnership, trust or company.
All rental property owners who run their rental properties at a loss will be affected.
This includes so-called ‘mum and dad’ type investors with one or two rental properties, as well as bigger players with a larger portfolio.
But if someone owns more than one residential rental property they can choose whether to apply the rules across their portfolio or on a property by property basis.
Inland Revenue emphasises that the rules don’t apply to someone’s main home, farmland, or property used mainly as a business premises.
The new rules, which apply from…………
Continue reading this article at the original source from Landlords.co.nz
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