Proposed Rental Income Tax Calculator NZ
Speculative: this tax does not exist
Rental profit is already taxed as income at your marginal rate. There is no separate rental or landlord tax on top of that. This page models a tax that has not been introduced, legislated or announced as government policy. It exists so you can see what such a tax would cost if it were ever introduced at a rate you choose.
The rate is yours to set on the slider. The starting figure is an illustrative round number, not a proposal, and is not attributed to any political party. No numbers on this page describe current New Zealand law, and none should be quoted as though they do.
This calculator models a separate tax or surcharge on rental income, on top of the income tax a landlord already pays. No such surcharge exists. Rental profit in New Zealand is already taxable: you declare the rent, deduct allowable expenses such as rates, insurance, repairs, management fees and, where the rules allow, interest, and the profit is taxed at your marginal rate along with your other income. A surcharge would sit above that, adding a further charge on either the gross rent or the net profit. Which of those two bases is used changes the result enormously, because a property can have substantial rent and very little profit, so this calculator lets you choose. You enter the annual rent and the expenses, pick whether the surcharge applies to gross rent or net profit, and move the slider to the rate you want to test.
A hypothetical figure for a tax that does not exist. It is arithmetic on the rate you chose, not a forecast, a policy costing or advice.
How it works
Net rental profit is annual gross rent less deductible expenses. The surcharge on net profit is that profit multiplied by the rate on the slider, and never less than zero, so a loss-making property attracts nothing. The surcharge on gross rent applies the same rate to the rent before expenses, which is shown alongside because the choice of base changes the result far more than the rate does.
Worked example
A property renting at $700 a week brings in $36,400 a year. With $21,000 of rates, insurance, repairs and management fees, the net profit is $15,400. A 5 percent surcharge on net profit would be $770 a year. The same 5 percent applied to gross rent would be $1,820, more than double, on a property whose profit has not changed at all.
Related calculators
- Rental Interest Deductibility Calculator: what interest you can actually claim.
- Rental Cash Flow Calculator: the real cash position on a rental.
- Proposed Land Tax Calculator: a hypothetical tax on land value.
- Proposed Capital Gains Tax Calculator: a hypothetical tax on the eventual sale.
- All Proposed Tax Calculators: the full speculative category, and what New Zealand actually taxes.