Tax/GST/LTC Expert

Ask Mark Withers, director of Withers Tsang & Co questions relating to Tax and Asset Structures

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

Rental expenses deductibility

Stav asks:

I have recently purchased a property for the purpose of renting it out. I am clear on the deductibility of some expenses (namely, insurance, rates and interest) However, I am not clear if other expenses can be deducted. Specifically, these are: Trade Me (for rent) listings, property valuation for bank lending purposes, and legal fees associated with buying the property (approximately $2k). Can you please advise?

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GST on property management

Vicki asks:

We need some help getting an answer with regards to our property management company charging GST on property management services ? We have one company that looks after our mix of commercial and residential properties.

It's our understanding that we have to CHARGE GST on all services whether residential or commercial, but is it the case that GST can only be claimed by the commercial percent of property if GST registered ? We know we cannot claim GST on residential expenses, but does this include property management for the residential ?

I'm checking with our accountant also but ir seems to be a grey area or different answers depending on who you ask...

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Structuring mortgages

Louana asks:

I have a rental property purchased at $500,000 and a home loan for $350,000. The rental property is under the LTC owned by my husband and I. We have been approved for refinancing and both the rental property and the home loan will be under the same bank which holds security on both properties.

Can we structure our mortgages as follows: rental property mortgage will be $550,000 and home loan mortgage will be $300,000? Can we load as much debt onto our rental but keep the home loan as low as possible so we can pay it off faster. In this case can we use the equity from the home loan to buy another rental property?


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