Calculate how much income tax you'll pay on your New Zealand rental property earnings — includes deductible expenses and marginal rate breakdown for 2025-26.
In New Zealand, rental income is taxed as ordinary income at your marginal rate — it stacks on top of your salary, wages, or business income. The Inland Revenue (IRD) 2025-26 tax rates are: 10.5% on income up to $14,000; 17.5% from $14,001–$48,000; 30% from $48,001–$70,000; 33% from $70,001–$180,000; and 39% above $180,000. Rental losses can often be ring-fenced under the residential rental property loss rules unless you meet specific criteria.
The key change for 2025 landlords: interest deductibility is fully restored from 1 April 2025. This means 100% of mortgage interest on residential rental properties can again be deducted against rental income — a significant improvement for cash-flow and tax liability compared to 2023-24 when only 50% was deductible.
The IRD allows the following deductions against rental income for residential properties:
Note: capital improvements (new additions, extensions) are NOT deductible as repairs. Depreciation on buildings was removed and has not been restored for residential properties.
Since 1 April 2019, residential rental losses are ring-fenced — they can only be offset against other residential rental income, not against salary or other income. Losses carry forward to future rental years. Exceptions apply for properties subject to the mixed-use asset rules and certain overseas properties. New builds that meet the criteria may also have different treatment under transitional rules. If your property runs at a loss, factor in that the tax saving only applies against future rental profits — consult an accountant for ring-fencing implications specific to your portfolio.
This calculator covers annual rental income tax only. If you sell a property within the Bright-Line period (2 years for properties acquired from 1 July 2024; 10 years for properties acquired between 27 March 2021 and 1 July 2024), capital gains may also be taxable. Use the NZ Bright-Line Tax Calculator to estimate tax on disposal. The total tax picture includes both ongoing rental income tax AND potential Bright-Line tax on sale.