10/08/2011 5:24:00
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People renting out their houses during Rugby World Cup are being warned of tax issues
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By Juliette Sivertsen
People renting out their houses during Rugby World Cup are being warned of tax issues.
Inland Revenue will be contacting those who listed their houses for rent during the tournament to remind them of their income tax obligations.
Business advisors Polson Higgs partner Michael Turner says many people who don’t usually rent out their properties may not have thought of this.
“If they are making the decision to rent out their house based on the amount of income they will get, they need to look at that after tax, not before tax,” he says.
Mr Turner says what might have seemed to be a lucrative deal, may not be so good once tax is taken into account.
He says while some costs will be relatively easy to identify such as power and cleaning, others are not so obvious such as repairs and rates.
“Good record keeping’s probably the key both in terms of the income and the expenses,” he says.
Mr Turner says issues may arise where early expenditure is needed, such as bringing the property up to standard for rental.
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