80% from Apr 2024, 100% from Apr 2025
Annual Cash Flow
$4,549.00
Total Equity
$250,000.00
LVR
66.7%
Gross Yield
4.2%
Properties
1
Portfolio analysis
This calculator aggregates all your rental properties to provide a total portfolio view. Rental income, expenses, and mortgage interest are summed across all properties. Tax is calculated on the net rental income at your marginal rate.
Cash flow calculation
Cash flow = Total rental income minus all expenses (including full mortgage interest) minus tax on rental income. This represents the actual cash left in your pocket.
LVR and bright-line
The LVR (Loan-to-Value Ratio) shows total borrowing as a percentage of property value. NZ banks typically require LVR below 65% for investment properties. The bright-line test taxes gains on properties sold within 2 years.
IRD-Aligned: Uses 2025-26 tax rates and interest deductibility rules.
How rental income is taxed and what landlords can claim as expenses
How is rental income taxed in New Zealand?
Rental income is added to your other income and taxed at your normal income tax rate. If you earn NZ$80,000 from your job and NZ$20,000 in net rental income, your total taxable income is NZ$100,000. The rental portion would mostly be taxed at 33% (the rate for income between NZ$70,001 and NZ$180,000).
Can I deduct mortgage interest on rental properties?
Interest deductibility depends on when you bought the property. For properties purchased before 27 March 2021, interest is fully deductible. For properties bought on or after that date, interest deductions were phased out but are being restored under current rules. By the 2025-26 tax year, 80% of interest is deductible, rising to 100% from 2025-26. Check the latest IRD guidance for your property.
What expenses can I claim as a landlord?
Common deductible expenses include: insurance, rates, property management fees, repairs and maintenance, advertising for tenants, accounting fees, body corporate fees, and travel to inspect the property. You cannot claim capital improvements (like adding a new room) as an expense — these are added to the cost base of the property instead.
What is the bright-line test?
The bright-line test taxes gains on residential property sold within a set period. For properties bought from 1 July 2024 onwards, the bright-line period is 2 years. If you buy a property for NZ$600,000 and sell it for NZ$700,000 within 2 years, the NZ$100,000 gain is taxable at your income tax rate. Your main home is exempt from the bright-line test.
What is the Loan-to-Value Ratio (LVR) and why does it matter?
The LVR is the total amount you owe on a property divided by its current value, shown as a percentage. NZ banks typically require an LVR of 65% or lower for investment properties. If your property is worth NZ$800,000, you can usually borrow up to NZ$520,000. A lower LVR also means lower interest costs and better cash flow.
Do I need to pay provisional tax on rental income?
If your total tax bill (after PAYE from your job) is more than NZ$5,000, you need to pay provisional tax. This is common for landlords with positive rental income. You pay provisional tax in instalments during the year. IRD calculates it based on your previous year's tax, or you can estimate your own amount.
Can I claim depreciation on my rental property?
You cannot claim depreciation on the building itself (residential buildings have a 0% depreciation rate). However, you can claim depreciation on chattels — items like carpets, curtains, appliances, and furniture. A NZ$3,000 oven might be depreciated over 10 years at NZ$300 per year using the straight-line method.
What happens if my rental property makes a loss?
If your allowable expenses exceed your rental income, you have a rental loss. You can offset this loss against your other income (like your salary), which reduces your overall tax bill. For example, a NZ$5,000 rental loss could save you NZ$1,650 in tax if you are on the 33% tax rate.
IRD-Aligned: Based on 2025 IRD rates and thresholds. For personal advice, speak to a qualified tax agent.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms
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