By PHILIP CHANDLER
Inland Revenue (IRD) is cutting some slack for landlords moving homes or rooms from Airbnb-type platforms to long-term rentals.
The short-term rental market took a dive when inbound tourism was shut down due to the Covid-19 pandemic.
Many landlords in that market switched to the long-term rental market to help pay their mortgage.
The problem, however, is they faced the risk of GST deregistration, meaning they’d have to return 15% of the market value of their property.
As local Findex tax advisory partner Daniel Gibbons says, ‘‘if you’re talking about a $1 million property, you’re writing a cheque for $150,000’’.
Now, IRD’s said you can stay GST-registered if you can promise you’ll revert to short-term lets within 18 months of switching to long-term letting.
An application to IRD has to be made by October 31, or that time period reduces to 12 months.
Gibbons says, given how uncertain the future is, it might be difficult to make that commitment, ‘‘but it’s worth doing’’.
For those intending permanently moving into long-term letting, ‘‘this relief isn’t for them’’, he adds.
‘‘They do have to really face it at some point, it’s going to come.’’