That mistake? Record-Keeping!
Here are 5 things you need to know:
👉 Many property investors get this wrong, costing them thousands in missed deductions, penalties, and more.
1. Keep business records for a minimum of seven years 📝
This isn’t just a recommendation – it’s a legal requirement! Records must be detailed, accurate, and readily available to the IRD if you’re audited.
2. It’s not actually seven years – it’s longer!
You need to retain records for seven years after the end of the income year they relate to, and sometimes up to 10 years if under audit or investigation. Don’t discard old records too soon!
3. Bank statements alone aren’t enough.
While important, bank statements don’t fully meet record-keeping requirements. Be sure to keep key documents like:
📑 Purchase/sale agreements
📄 Loan and mortgage documents
🏠 Rental agreements and income records
🛠️ Invoices and receipts for property-related expenses
4. Your records must be in English or te reo Māori and kept in New Zealand unless approved otherwise.
5. What poor record keeping could cost you:
👉 Lost deductible expenses – Missing records = missed deductions.
👉 Reduced insurance payouts – Without records, proving claims is difficult.
👉 Audit penalties – An IRD audit could lead to penalties or unfavorable assessments.
🎯 The solution?
Get your basics right, ensure good record keeping and for at least 7 years.
🔑 Key Takeaways – Get Your Basics Right.
Here if your checklist of action points:
✅ Keep your personal and business finances separate.
✅ Store records for at least 7 years (or longer if required).
✅ Use accounting software like Xero for easy compliance.
📚 This is from my book, 10 Biggest Property Tax Mistakes Kiwis Make That Cost Thousands.
To download the full book 👉 click here https://lnkd.in/g_W7WNQK
