What kind of tax breaks can you get on a second property?

As Kiwi’s, one of our biggest investments is property.  But what kind of tax breaks can you get on a second property?  Luke Snedden of Threefold explains…

You should look at ownership of investment properties as a business. By owning an investment property that is cash flow negative, i.e that you have to top up to pay for Interest payments, insurance and/or rates, means that  the business makes a loss. Whether you own it in your own name or through a “Look through Company” (LTC) you are able to offset that loss against other income that you earn, thus reducing the income tax you have to pay.

It is best to have an Accountant advise you on your own situation and what the best ownership structure for you would be. Once you have finalised this a good Mortgage Adviser will be able to help structure your lending in the most efficient way possible.

Luke Snedden is a Partner/Registered Financial Advisor of Threefold Insurance, Mortgages and Advice – www.threefold.co.nz, 021 480 064.

Anita Dobson, Harcourts Tandem Realty Ltd – 021 337 093.  As always, please ensure you seek your own, independent advice.