No return filed - "should I expect a big tax bill"?
Question from hamish updated on 7th September 2013:
I bought a property two years ago and have been renting it out (I've never lived in it). It runs at a slight loss but I haven't done a tax return during this time. Am I breaking any sort of law? Should I expect a big tax bill? What should I do about it? Please forgive my ignorance and offer me some advice.
Our expert Mark Withers responded:
Yes NZ income tax law requires you to file an IR3 income tax return that should include a statement of gross rent earned less expenditure. If there is a loss from the renting they probably owe you a refund. If there is tax due on a profit there will be late payment penalties and interest. I suggest you assemble your papers and engage an accountant to produce the rental statement and file your tax return asap.
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.