calculator deductible mortgage interest

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Forums › Finance and wealth management › calculator deductible mortgage interest

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5896 posts

Uber Geek

#2974775 29-Sep-2022 13:17

samgdan:

Regarding the penalty, well there is no way to escape from that but is ok at least she is trying to get things done right, better late than never.

thank you,

Yea. You need a professional accountant's advice about how to resolve this.

There may be Provisional Tax issues here and the potential to mitigate unpaid/overdue penalty payments using tax pooling.

There is also a very specific way of disclosing this to the IRD that a tax agent will be able to help your friend navigate which may yield more favourable outcomes.

samgdan

160 posts

Master Geek

#2982124 12-Oct-2022 22:28

Handle9: You don’t need an online calculator, the calculations are very simple. My post above has the rates and dates when they changed.

You plug the numbers into an IR3R and you’re done. She’ll have to pay a late filing fee but it’s really not a big penalty for a low value return.

This is the correct answer. it was easier that expected. problem has been resolved.

MikeAqua

7773 posts

Uber Geek

#2982181 13-Oct-2022 09:28

antonknee: Your friend should ideally seek the advice of an accountant at some point. They are running a business - rental properties are not a hobby, and it annoys me when people don’t take their business seriously enough to get proper advice on running it properly.

I don't let accountants and lawyers (other than the initial conveyancing) anywhere near our rented property. The margins are thin enough these days, without spending money on expensive professionals.

I use a spreadsheet to calculate my interest and other deductions. I am personally quite aggressive on the deductions. But I'm confident that any mistakes are minor enough for IRD not to be troubled by them.

Mike

samgdan

160 posts

Master Geek

#2982186 13-Oct-2022 09:44

MikeAqua:

antonknee: Your friend should ideally seek the advice of an accountant at some point. They are running a business - rental properties are not a hobby, and it annoys me when people don’t take their business seriously enough to get proper advice on running it properly.

I don't let accountants and lawyers (other than the initial conveyancing) anywhere near our rented property. The margins are thin enough these days, without spending money on expensive professionals.

I use a spreadsheet to calculate my interest and other deductions. I am personally quite aggressive on the deductions. But I'm confident that any mistakes are minor enough for IRD not to be troubled by them.

in 2025 most landlords (if not all) will need to pay taxes as mortgage interest cannot be claimed. I hope National can change that if they are elected in the next elections.

blackjack17

1705 posts

Uber Geek

#2982216 13-Oct-2022 11:26

samgdan:

in 2025 most landlords (if not all) will need to pay taxes as mortgage interest cannot be claimed. I hope National can change that if they are elected in the next elections.

In 2022 (and all years prior) all landlords need to pay tax. The rules regarding what can be deducted are changing.

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MikeAqua

7773 posts

Uber Geek

#2982308 13-Oct-2022 13:55

blackjack17:

In 2022 (and all years prior) all landlords need to pay tax. The rules regarding what can be deducted are changing.

Only if you make a profit.

Mike

samgdan

160 posts

Master Geek

#2982310 13-Oct-2022 14:06

blackjack17:

samgdan:

in 2025 most landlords (if not all) will need to pay taxes as mortgage interest cannot be claimed. I hope National can change that if they are elected in the next elections.

In 2022 (and all years prior) all landlords need to pay tax. The rules regarding what can be deducted are changing.

Yes but what about in 2025, 2026 etc...? if you cant claim the mortgage interest, for sure landlord will need to pay taxes....

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samgdan

160 posts

Master Geek

#2982311 13-Oct-2022 14:08

MikeAqua:

blackjack17:

In 2022 (and all years prior) all landlords need to pay tax. The rules regarding what can be deducted are changing.

Only if you make a profit.

correct, but how not make a profit in 2025, 2026 etc..? unlikely that the cost of any require repairs will go over the amount of rent that a landlord could get in a year.

blackjack17

1705 posts

Uber Geek

#2982325 13-Oct-2022 15:26

samgdan:

MikeAqua:

blackjack17:

In 2022 (and all years prior) all landlords need to pay tax. The rules regarding what can be deducted are changing.

Only if you make a profit.

correct, but how not make a profit in 2025, 2026 etc..? unlikely that the cost of any require repairs will go over the amount of rent that a landlord could get in a year.

Then this will have to be factored into the economics of running a rental. Our one with deprecation and rolled over losses will still have us having a negative tax bill for a few years.

Rules change, such is life.

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MikeAqua

7773 posts

Uber Geek

#2982327 13-Oct-2022 15:32

samgdan:

correct, but how not make a profit in 2025, 2026 etc..? unlikely that the cost of any require repairs will go over the amount of rent that a landlord could get in a year.

Yeah, we will make a small taxable profit soon.

The inability to use a loss from a rental property was really the end of the golden weather. It was good while it lasted.

I don't really mind, as one day we will move back into the property, ourselves, build a new house and sell the existing one for removal/demo. Before then, I foresee a lot of property maintenance costs.

Mike

blackjack17

1705 posts

Uber Geek

#2982331 13-Oct-2022 15:46

samgdan:

correct, but how not make a profit in 2025, 2026 etc..? unlikely that the cost of any require repairs will go over the amount of rent that a landlord could get in a year.

Attitudes like this really highlight the importance of a capital gains tax. The expectation of running a business year on year at a loss so to avoid pay tax, while the asset appreciates and then selling for a tax free profit.

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samgdan

160 posts

Master Geek

#2982645 14-Oct-2022 14:18

blackjack17:

samgdan:

MikeAqua:

blackjack17:

In 2022 (and all years prior) all landlords need to pay tax. The rules regarding what can be deducted are changing.

Only if you make a profit.

correct, but how not make a profit in 2025, 2026 etc..? unlikely that the cost of any require repairs will go over the amount of rent that a landlord could get in a year.

Then this will have to be factored into the economics of running a rental. Our one with deprecation and rolled over losses will still have us having a negative tax bill for a few years.

Rules change, such is life.

that is right, rules change, same than the cost of renting a property that will keep going up.

at the end of the day tenants are the big losers....

lachlanw

164 posts

Master Geek

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Subscriber

#2982698 14-Oct-2022 16:58

blackjack17:

samgdan:

correct, but how not make a profit in 2025, 2026 etc..? unlikely that the cost of any require repairs will go over the amount of rent that a landlord could get in a year.

Attitudes like this really highlight the importance of a capital gains tax. The expectation of running a business year on year at a loss so to avoid pay tax, while the asset appreciates and then selling for a tax free profit.

All it highlights is the need to increase supply of housing to bring the market into equilibrium. A change to the tax legislation which brings the treatment of a class of assets out of sync with the rest of the tax law isn't going to achieve this.

mattwnz

20141 posts

Uber Geek

#2982706 14-Oct-2022 17:53

blackjack17:

samgdan:

in 2025 most landlords (if not all) will need to pay taxes as mortgage interest cannot be claimed. I hope National can change that if they are elected in the next elections.

In 2022 (and all years prior) all landlords need to pay tax. The rules regarding what can be deducted are changing.

Although apparently National are planning on reversing this if they get in with Act.

afe66

3181 posts

Uber Geek

Lifetime subscriber

#2982953 15-Oct-2022 13:11

Great so I will continue to outbid people wanting to buy houses because my investment house is tax deductible but not the house you live in.

This does nothing for housing stock numbers.... If you are going to bring in tax deductible for houses, limit it to new builds.

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