Rules may change for boarders

Sunday 24 October 2004

The tax liabilities of people who host paying boarders may be changed to reflect the income they receive rather than the number of people they put up.

By The Landlord

Under existing rules, anyone with one boarder is not required to return their income. Those with two to four boarders pay tax at a rate of 20 per cent, while those with more than four boarders claim in the normal way for businesses.

Inland Revenue is seeking feedback on a proposal to base tax liability on the amount of income people receive rather than the number of boarders.

The proposed change also sets out a series of standard costs that people can use when claiming tax deductible expenses to off-set against their income and make filing returns easier.


IRD service delivery deputy commissioner Naomi Ferguson said the changes would correct the anomaly where somebody could have a similar income to a small business, yet not have to file a tax return.

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