The information on this form is based on current tax laws at the time
Note 1 General
Fill in a separate IR3R for each property rented out. Each IR3R covers
the year to your balance date.
Note 2 Income
Enter the total rents received in Box 1. Enter any other income related to
the rental property, such as insurance receipts or rates refunds in Box2.
If you sell or dispose of any of your assets you may be required to account
for the loss or gain in Box 3 - call us on 0800 377 774.
Add up Boxes 1, 2 and 3 to calculate your total income. If Box 3 is a loss,
subtract it from the sum of Boxes 1 and 2. Enter the total income in Box4.
Note 3 Expenses
Claim ongoing expenses such as rates, insurance, interest and
depreciation in proportion to the number of months the property was
available for renting out, eg, if the property was available for 10 months,
you can claim
of these expenses.
Expense for a holiday home or bach used both privately and to earn
income may be subject to the mixed-use asset rules see the Rental
income - IR264 booklet for more information.
Note 4 Repairs, maintenance and other expenses
Please fully explain any claims for repairs, maintenance and other
expenses. You may claim repairs and maintenance but not additions or
improvements to property or plant. Improvements to property or plant can
be depreciated. If there isn’t enough space, please attach a separate note.
Note 5 Residential rental properties
From the start of the 2019-2020 income year, deductions for residential
rental properties are subject to residential property deduction rules.
The new rules limit the amount of deductions you can claim if your
residential rental property makes a loss in an income year. You can use
the Residential property deductions worksheets - IR1226 to help you
complete your return.
Note 6 Depreciation on buildings
From the 2011-12 income year, depreciation on buildings has reduced
to 0% where buildings have an economic life of more than 50 years. For
more information refer to Depreciation - a guide for businesses - IR260.
Note 7 Depreciation on assets
You may depreciate each item individually or pool some or all of the
assets to calculate depreciation. Assets which can be pooled are those
- are not used privately, and
- cost $5,000 or less, or
- have been depreciated so their adjusted tax value is $5,000 or less.
Pool depreciation is calculated on the average pool value at a single rate
using the DV method. The rate you must use for the pool is the lowest rate
for an asset in the pool. Once you have included an asset in a pool you
can segregate it only if you use the asset for private use.
If you switch from the DV to the SL method for assets not pooled,
calculate depreciation on the opening adjusted tax value instead of the
To nd the correct rate of deprciation for an asset, please see our
depreciation rate nder at ird.govt.nz/tools-calculators
Note 8 Record keeping
Keep your receipts and invoices with your records in case we request
them. You must keep all your records for seven years.
Note 9 More information
Our booklets Rental income - IR264, Depreciation - IR260 and
Depreciation rates - IR265 may help you. You can get these booklets and
this IR3R form at ird.govt.nz or by calling 0800 257 773. If you need more
help call us on 0800 377 774.