Property Accounting

Effective Structure | Efficient Tax & Protection

NZ Property Accounting Services


Investment in residential property (houses) and commercial property (offices, warehouses, retail space, industrial) in New Zealand has been a popular option for the building of wealth for decades, and with low investment returns elsewhere, it doesn’t seem likely to change any time soon. At AAT Accounting, we are NZ Property Accountants, and active investors too – with several residential and commercial investment properties owned, as well as a few non-property investments.

Having a specialist property accountant who knows lives and breathes property (and invests in property themselves) will play an important part in your desired property and wealth accumulation, while protecting assets and legally minimising tax – all while considering overall cost-benefit tradeoffs.

Property accounting is a specialist area. At AAT Accounting, we only do property*. Most of our client base are residential property investors, with some commercial property investors, property traders, developers, real estate agents and property managers thrown in for good measure. The sorts of property tax and accounting issues that a general accountant might come across once a year, we see a couple times a month.

We have helped hundreds of New Zealand investment property owners since establishment in 2014, and that number is growing every month. Clients range from first-time investors trying to make sure they get things set up right, through to wealthy long term investors with many properties and complicated structures that have evolved over time. Working only with property clients helps ensure we give the best advice, work efficiently, and at a great price.

As property tax and accounting becomes ever more complex with tax tweaks such as the bright line rule and ringfencing tax occurring with increasing frequency, it’s as important as it has ever been to work with a specialist property investment accountant who keeps on top of movements in the industry and can ensure new and limited time opportunities aren’t missed.

Extensive hands-on investment experience and a solid knowledge of recent and historical property tax laws means we know and clearly advise you which rental property expenses are tax deductible. Regular experience dealing with new and seasoned investors means we can design and implement the ideal structure for your investments to protect your investments and manage your rental property taxes. You will be supported in your investment journey by good common sense advice, with prompt response times, from experienced accountants and investors.


* We can also assist with your small business accounts, but only if you’re also a property industry client.

Why Do I Need A Specialist?


While there are a few tips and tricks that a general accountant might miss, with a bit of work you can undoubtedly find these for free in publically available resources and online forums.

Really, the true benefit of a specialist property accountant is in preventing the sort of problems that you can run into, such as:

  • Changing the shareholding of your residential-property holding LTC, triggering a deemed disposal with implications under the bright line rules

  • Selling an investment property (on the open market, or to a related entity) within the bright line period, resulting in large tax bills

  • Failing to get a chattels valuation, resulting in many thousands of missed tax deductions.

  • Considering tax structure requirements too late in a subdivision processAnnual financial statements and income tax returns

  • Restructuring property ownership without ensuring the correct and optimal sales value.

  • Not considering GST implications when buying and selling properties for profit

  • Buying in the wrong entity, then operating an inefficient structure until the Bright Line rule allows a change, or worse – taking a significant tax hit

  • Filing your tax return incorrectly so that you are assessed for ACC on your rental property income

  • …or so that IRD treats your residential rental losses as commercial and sends you a refund, only to discover your mistake years later and apply penalties!

It’s for these reason you need to have an expert in tax compliance services and accounting for investment property. But this knowledge only works with open communication; so the benefit of fixed fee services mean you never need to worry about getting an extra bill because you sent a heads-up email.

Specialist Property Accounting Knowledge:

  • Property investment structuringring a deemed disposal with implications under the bright line rules

  • Tax on rental income

  • Residential rental property accounting

  • Commercial rental property accounting

  • Rental property tax returns (IR3, IR4, IR6, IR3R, IR10 etc)

  • Rental income financial statements and tax compliance

  • New Zealand property ownership tax obligations for non-residents

  • Investment property tax deductions

  • Depreciation on rental properties

  • Chattels depreciation and chattels valuation recommendations

  • Property tax laws

  • Bright Line Test / Bright Line Rule

  • Residential ringfencing

  • Tax compliance services for rental owners, real estate agents.

What do I claim?


For a full list of the treatment of deductible and non-deductible expenses relating to your property, check out the Residential Property Investment FAQ. But the main ones are below:

  • Mortgage Interest (not principal payments)

  • Tenant sourcing and management costs (Advertising, Management Fees, etc)

  • Insurance (and/or Body Corporate, which usually includes general insurance)

  • Rates (Land & Water)

  • Repairs (but not capital improvements – can be a tricky distinction)

  • Accounting & Legal Fees

  • Travel and Management Costs (proportional use of private vehicle, phone, etc)

Enquiry


Interested in hearing more? Contact us below!

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