With major tax changes taking effect in 2025, including interest deductibility and bright-line updates, property investors need to prepare for the next tax year.
Here’s a practical checklist to help you get your records in order, optimise deductions and plan your cashflow for the year ahead
Read on for tax tips sourced from New Zealand’s IRD and local experts. Note that the information provided is not tax advice. For expert tax advice, contact a certified accountant.
Protect Against Tax Scams
Tax scams are most common around EOFY. Always verify the legitimacy of any communication claiming to be from the IRD and never share personal information if you are suspicious of a link or message.
Keep Your Records Organised
The IRD requires investors to keep records for at least 7 years. This includes:
- Tenancy agreements and rent received.
- Invoices and receipts for rates, insurance, maintenance.
- Loan statements showing interest paid.
- Legal and professional fees.
Repairs vs Improvements – Know the Difference
- Repairs and maintenance (e.g. fixing a leaking pipe or repainting) are deductible in the year incurred.
- Improvements (e.g. extensions, new kitchens) are capital expenses and not immediately deductible.
This distinction is often overlooked, but it makes a big difference to your tax bill.
Interest Deductibility – Where We are in 2025
By April 2026, this is 100% deductible.
Want detailed worked examples? Read our full guide on Interest Deductibility Changes in New Zealand.
Bright-Line Test – New 2-year Rule from July 2025
From 1 July 2025, the bright-line test shortened to 2 years.
- If you sell within 2 years, there could be possible tax on your gain.
- Hold onto property for more than 2 years and this will be exempted.
this gives investors more flexibility than the previous 5-10 year rules.
Other Expenses You Might Claim
Some expenses can be prepaid and deducted in the year paid, including:
- Rates and Insurance.
- Accounting Fees.
- Smaller maintenance jobs.
- Property management fees.
- Landlord insurance.
Check with your accountant if pre-paying makes sense before 31 March.
Understand what aspects of a rental property you can depreciate
While you can’t depreciate your residential buildings, you can claim depreciation on chattels and fit-outs within the property. Items like carpets, appliances, and furniture can be depreciated over their useful lives. Ensure you have a detailed depreciation schedule to support your claims. The IRD’s depreciation guide offers comprehensive information on calculating and claiming these deductions.
Why Professional Advice Pays Off
Tax rules change regularly. A registered tax adviser can:
- Confirm which expenses you can claim.
- Structure your portfolio for efficiency.
- Help avoid IRD issues down the line.
How Tax Planning Affects Your Cashflow
Every deduction you can claim – from interest to repairs, lowers your tax bill and frees up money to reinvest. Staying ahead of the rules means better cashflow and less financial pressure at year-end.
Staying Ahead with Property Tax Planning
While the tips above provide a useful checklist, every investor’s situation is unique. Getting professional tax advice ensures you claim everything you’re entitled to, avoids costly mistakes, and help you plan confidently for the next financial year.
What to do next: If you’d like to explore how deposit size impacts your cashflow and borrowing power, keep an eye out for our comprehensive 2025 deposit guide (coming soon). Or, speak to us today – we’ll connect you with trusted accountants and guide you through structuring your loans to support your property goals. Contact us to plan your next move.
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