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Te tāke i tō whare reti o tāwāhi Tax on your overseas rental property

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New Zealand tax residents pay tax on income from New Zealand and overseas. This includes income from overseas rental property.

You might be able to claim tax deductions for expenses relating to the rental income.

You might be able to claim a credit for tax you’ve paid to another country.

Necessary information about overseas rental income should be reported in a New Zealand income tax return, IR3.

Offshore mortgage

If you have an overseas mortgage on the rental property, you may need to pay non-resident withholding tax (NRWT) or approved issuer levy (AIL) on the interest paid overseas.

Financial arrangement rules apply if an overseas mortgage exceeds certain thresholds. The rules may also apply to foreign currency account or loans. This means any foreign exchange gain or loss may need to be included in your New Zealand income tax return.

If New Zealand has a double tax agreement (DTA) with the other country this may affect the amount of tax you pay.