Our Experts Answer:
This is the sort of setup that IRD is looking at with LAQC's - people using their own home as a rental and getting a tax deduction for doing so. Yours is a slightly different situation in that you have one, possibly two self contained flats. Having said that, to put this property into an LAQC would be quite an aggressive tax strategy and probably not worth the potential hassle you may get from IRD. Your options then are to put the property into your personal names and make an adjustment for your personal portion of the expenses, or put the property into a trust, if you were concerned about asset protection (which I would be given that you are about to start your own plumbing business). In both cases, you need to make sure that you do not pay any rent for your part of the house and that you do not claim more than the portion of the expenses that relate to the flat/s, otherwise you could be in a bit of hot water...
Kenina Court is a director of Acorn Solutions Limited, an accounting firm dedicated to working with clients to help them create wealth. She is an avid property investor, entrepreneur and seminar presenter on asset protection and wealth strategies.