Lifetime Property Accounting

Interest rates -

In theory, Interest Rates should start to increase, based on Swap Rates rising from 3.06% on 30/6/26 to 3.38% today.

As we have previously mentioned, predicting Interest Rates is extremely difficult, and Swap Rates are just one piece of a very complicated puzzle.

In theory, the recent OCR announcement and high June quarter inflation should have already been priced in by the banks, as both were widely anticipated. However, this could change at any time.

"You can claim that", or "that is tax deductible" - What does this really mean?

Does it mean I should rush out and buy that item that I don't really need, just because "I can claim it"?

Both these comments mean that the expense is allowable and can be offset against your rental income, reducing your profit and therefore the amount of tax you pay. The maximum tax benefit a taxpayer can obtain is 39%, meaning the taxpayer is still funding at least 61% of the cost of the item themselves.

1) If a rental property investor is already making a taxable loss, having an additional expense to claim or deduct will not initially result in any tax savings. Depending on the level of losses, it could be years before any tax benefit is realised, or in some cases the tax benefit may never be realised.

2) If a rental property investor is making a profit, an additional expense will reduce that profit and save tax. For example, if an investor signs up to a property newsletter for $1,000 per year and is on the 33% tax rate, they will save $330 in tax each year.

The most important question - Do you really need this item?

In the example above, the property investor is saving $330 in tax, but they still have to pay the remaining $670 themselves (1,000 less the $330 tax saved). Are you receiving at least $670 worth of benefit from this item? Will it help you become a better landlord or generate greater capital gains and/or cashflow in the future?

Can you claim the cost of accommodation and a rental car?

Following our example yesterday (scenario at the bottom of this post), Joe Bloggs lives in Hamilton and has flown to Christchurch to inspect his 3 rentals, plus do some repairs and hopefully enjoy the snow at some point.

Joe hires a rental car for Thursday to Tuesday, and also incurs petrol costs.
Joe stays at the Novotel hotel for 5 nights.

Joe works on the rentals Thursday and Friday, and then Monday and Tuesday.
Joe goes snowboarding on Saturday and Sunday.

Can Joe claim something for the rental car? Yes he can claim a fair portion for the rental business. Based on the information provided, that would be 4 days out of 6, or 67% of the rental car cost.

Petrol? – You need to be fair and reasonable, and it is likely that a higher portion of the petrol is likely to be a result of going to Mt Hutt.

Can Joe claim some of the accommodation? Yes he can claim the portion that relates to the rental business. As he worked 4 days on the rentals, 3 nights would be required for the rental business, so could claim 3 out of the 5 nights, or 60%.


Example information from yesterday post – Joe Bloggs
- Joe lives in Hamilton and has 3 rental properties in Christchurch.
- Joe needs to inspect the 3 properties and also do some repairs on one of the properties.
- Joe decides to fly down to Christchurch and books flights.
- As Joe loves snowboarding, he decides to add a couple of extra days into the trip to go to Mt Hutt snowboarding.
- Joe flies down Thursday morning and then spends Thursday and Friday doing inspections and working on the rental.
- Then snowboards on Saturday and Sunday.
- And does further repairs on Monday and Tuesday, before flying home on Tuesday afternoon.

Can you claim the cost of flights?

The cost of flights has slightly different tax treatment to normal travel or expenses.

The deduction depends on what was the “main purpose” of the flights. If the main purpose was to fly to inspect rental properties, or repair rental properties, then the cost of the flights will be deductible.

Example – Joe Bloggs
Joe lives in Hamilton and has 3 rental properties in Christchurch.
Joe needs to inspect the 3 properties and also do some repairs on one of the properties.
Joe decides to fly down to Christchurch and books flights.
As Joe loves snowboarding, he decides to add a couple of extra days into the trip to go to Mt Hutt snowboarding.
Joe flies down Thursday morning and then spends Thursday and Friday doing inspections and working on the rental.
Then snowboards on Saturday and Sunday.
And does further repairs on Monday and Tuesday, before flying home on Tuesday afternoon.

Are the flights deductible? Yes as the main purpose of the flights was to inspect and repair the rentals.

See our next article on expenses while in Christchurch.

How bad is the recent spike in Crude Oil Prices?

6/7/26 it was $68.739
13/7/26 it was $77.990

That's a 13.5% increase in just a few days!

However, oil prices are still well below the 3/6/26 price of $95.766.

Oil prices can have a major effect on Inflation, which in turn can have a major effect on Interest Rates.

On Friday, we posted Part 1 of "Should you keep your personal house as a rental".

In Part 2 of this short video series, Ross from Lifetime Property Accounting explains what happens once you decide to keep your home as a rental.

He covers:
- What a restructure is and how it actually works
- When it might help you save on tax (and when it won’t)
- Why you need to be careful to avoid tax traps
- The value of getting expert advice

Whether you’ve already converted your home into a rental or are still weighing up your options, this video gives you a clear, simple overview of what to consider next.

Should You Keep Your Old Home as a Rental? Part 2 - Restructuring Restructuring your rental: What does it really mean?In Part 2 of ...

GST risk – As soon as we hear the words Airbnb or short‑term accommodation, we think GST.

This is a great video on the big GST risk (especially with properties purchased years ago where the value is now a lot higher).

Common mistake #1 = The $60,000 GST threshold is per entity, not per property.

Common mistake #2 = The $60,000 GST threshold applies to any 12‑month period, not the financial year.

Common mistake #3 = The $60,000 GST threshold is based on turnover — revenue before any deductions are taken off. For example, if you received $59,500 into your bank account over a 12‑month period from Airbnb, you will be over the threshold, as Airbnb will already have deducted its fees from this amount.

Common mistake #4 = “I didn’t claim GST on the property, therefore I don’t have to pay GST when I sell.” If the entity is GST‑registered or over GST threshold, and the property is used for a taxable activity (Airbnb, short‑term accommodation), GST will be payable on sale or on deregistration.

Common mistake #5 = “GST won’t cost me as I’ll sell zero‑rated.” Read this post:
https://www.facebook.com/thepropertyaccountant/posts/pfbid02BQRLN2qtErY3jtXh14Rf3ZJjP8TQr4gs21zhsDU1tGy9yGD8CHeJDbqAaeYVFDvWl

Big GST risk with Airbnb or short term accommodation Risk of losing hundreds of thousands of dollars through a GST issue...

Adding a Transportable new house to a rental property can be a great way to improve cashflow.

This example shows an expected Cash Surplus before tax of $7,574 ($6,725 after tax).

There are two major risks:
1) Costs are often higher than you expect. Prices for Transportable homes are often advertised at a low starting price, but there can be many additional costs. At a recent property investor event, a building company speaker quoted $280,000 for the full house and move, but there are still likely to be extras such as driveway, paths, fencing and landscaping.

2) The increase in property value is often less than the total cost. There is a much smaller market for properties with 2 houses on 1 title, making them harder to sell.
There are also potential issues with Subdivision tax laws, which we will cover in a post next week.

Assumptions:
- interest only example. If principal repayments were also being made over 30 years, the property would still be expected to be cashflow positive over our first 10 years of predictions.
- 100% lending (most property investors borrow 100%).
- current interest rate used. Our 10 year predictions show an average Cash Surplus of $7,140 per year after tax, and have used an average estimated interest rate of around 5.5%.
- Lower accounting, as investor already has an existing rental property.
- Lower rates and insurances, as investor already has an existing rental property.
- This is just an example. If you are considering going ahead, we recommend that you talk to a property manager to establish likely rent and vacancy rate.

Should You Keep Your Old Home as a Rental? Part 1 - The Numbers

Thinking about turning your home into a rental?

Before you dive in, make sure the numbers stack up.

In this short video, Ross from Lifetime Property Accounting breaks down:
- How to calculate the real cash flow of keeping your home as a rental.
- Why gross yield alone can be misleading.
- What you need to weigh up before deciding to hold or sell.

Whether you are upgrading or relocating, it pays to look closely at the numbers before making a move.

Should You Keep Your Old Home as a Rental? Part 1 - The Numbers Thinking about turning your home into a rental?Before you dive in...