Te tātai tangohanga whare rēti ā-huinga whare Working out residential property deductions on a portfolio basis

The portfolio basis can be used when you have one or more residential properties in an income year. This is the default basis. 

When you work out your deductions on a portfolio basis:

• the allowable deductions for all properties in the portfolio are used against all the income from them
• you work out your excess deductions across the whole portfolio
• you cannot use excess deductions against your other income. For example your salary and wages. 
• you must carry excess deductions forward and use them against future portfolio income (unless you sell all the portfolio properties and all the sales were taxable).

Using excess deductions when selling property

Changing the residential rental deduction basis 

Once you've used the portfolio basis for a property, you cannot change to the individual property basis for that property.

Using the portfolio and individual property basis together

You do not have to choose one basis if you have two or more properties. You can use both. One or more properties could be in the portfolio. You then use the individual property basis for any others.  

Talk to your tax advisor to see what is best for you.