Buying guide
Interest deductibility on rental property explained
The laws are changing so we’ve got up to date answers to make life easier.
AI summary
The NZ government is reintroducing interest deductibility for rental properties, reversing the previous phase-out. This allows landlords to again deduct mortgage interest costs from their rental income.
The new phase-in schedule is:
- 60% deductible for the 2023/24 tax year
- 80% for the 2024/25 tax year
- 100% from 2025/26 onwards
Additionally, the bright-line test has been shortened to two years. Landlords should consult a tax accountant to navigate these changes and ensure compliance.
But first, what is interest deductibility on rental property?
Current rules — what's deductible now?
There are tax advantages to owning a new build property.
Other changes for investors to note
Should I be doing anything now?
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