Can I claim expenses while living in my rental property?

Question from Tim updated on 5th October 2006:

We have moved into our rental to renovate after tenants have moved out. We have spent $30000 on expenses. Can we claim these by paying rent so expenses can be deductable.

Our expert responded:

Hi Tim, thanks for your question. The question depends on the structure you own the property under e.g. Trust, LAQC, personal ownership, therefore this question is better asked to a qualified accountant . Generally if you have it in a LAQC structure, there is nothing stopping you living there. In fact a few years ago, accountants were suggesting that if you paid 'market rent', you could claim expenses (which is the answer to your question) and depreciation. This advice is now out of favour and the IRD are starting to look closely at properties in this type of structure. From my understainding if you are are living in your rental property, you cannot claim expenses or depreciation. However, I would check this carefully with your accountant based on the structure you own the property in. If you need to find a good property accountant, I strongly recommend Kenina Court of Acorn Solutions, Appollo Dr, Mirangi Bay, Auckland I hope this helps.

Lisa is a Certified Financial Planner and a director of Acumen Inc, a financial services company offering a full range of services including portfolio management, investment advice, property investment advice and mentoring courses, insurance and mortgages.


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