Holiday Home Anyone?

Holiday Home Anyone?

Property is one of the most popular investments for New Zealanders. Mixed use assets are becoming a common area we are talking to our clients about.

The laws have changed in relation to GST and dwellings. You need to be fully aware of the GST consequences if you are looking to purchase a holiday home which will be used for a combination of private and business i.e. listing it on Book a Bach.Holiday homes are no longer considered an exempt supply for GST like residential rental properties. If you receive rent of $60,000 or more you may need to register and return GST on the rental income.

If your mixed use holiday home is owned in a structure which you also run a GST taxable activity from your property maybe caught in the GST net. There is an exemption for properties purchased before 1 April 2011 which allows a person the option to exclude the holiday home from their taxable activity (providing the rental income is less than $60,000).The exemption doesn’t apply to properties purchased after 1 April 2011. We suggest contacting your accountant before entering into an agreement to purchase a property.