Keeping your New Zealand rental after you move to Australia

First, check whether Australia taxes the rent at all

This article assumes you are an Australian resident for tax purposes and not a temporary resident. If you are a New Zealander, read the next two paragraphs first.

The ATO treats a Special Category Visa as a temporary visa. If you hold one, and neither you nor your partner is an Australian citizen, a permanent resident or a protected Special Category Visa holder, you can be a temporary resident. Temporary residents don't pay Australian tax on most foreign income, so the New Zealand rent stays out of the Australian return, and capital gains tax only reaches taxable Australian property.

That usually ends when you or your partner becomes a citizen or permanent resident, and it doesn't come back. Someone who has been an Australian resident without being a temporary resident at any time after 6 April 2006 can't later become a temporary resident, even on a temporary visa.

Check the New Zealand side too. You only stop being a New Zealand tax resident if you have no permanent place of abode there and are away for more than 325 days in a 12-month period, and Inland Revenue says a house you own and rent out can still be a permanent place of abode. If both countries treat you as resident, the Double Tax Agreement decides. Our guide to moving from New Zealand to Brisbane covers this.

Two returns for one house

Article 6 of the Australia–New Zealand Double Tax Agreement lets New Zealand tax income from real property located there. Once you are a non-resident, Inland Revenue expects you to hold an IRD number and file a non-resident individual return, the IR3NR, declaring the rent each year.

Australia taxes the same rent, because an Australian resident declares income from anywhere in the world. It goes in the return at Other foreign income, and the ATO's instructions say the gross rent includes any New Zealand tax taken out of it.

The foreign income tax offset is what stops the same income being taxed in full twice. It reduces your Australian tax by the New Zealand tax paid on that income, with limits. It is not a refund of New Zealand tax. You can only claim it once the New Zealand tax has actually been paid, and if your claim is more than $1,000 you have to work out an offset limit first, which can leave part of the New Zealand tax unused.

The years don't line up

New Zealand's tax year runs from 1 April to 31 March. Australia's runs from 1 July to 30 June. The ATO says you work out which months belong to which Australian year and apportion the income and the offset to match.

Converting New Zealand dollars

Every New Zealand amount in the Australian return has to be converted to Australian dollars: the rent, each deduction and the New Zealand tax. The ATO accepts either the exchange rate at the time of each transaction or an average rate over a period of up to 12 months, as long as the average is a reasonable approximation of what the actual rates would have given.

For regular rent, repairs and agent's fees, an average rate is normally fine. The ATO's own example then says the same owner can't use an average rate when the property is sold, because one large capital transaction needs the rate on the day. The ATO publishes Reserve Bank of Australia rates for the New Zealand dollar. Note which rate you used and where it came from.

Deductions follow two sets of rules

In New Zealand, interest on a residential rental loan is fully deductible again from 1 April 2025, after several years of limits; for the year to 31 March 2025 the figure was 80%. New Zealand also ring-fences residential rental deductions. They can only be used against rental income, including income from selling a property, and any excess is carried forward to a later year instead of reducing other income.

Australia applies its own deduction rules to the same costs, so the New Zealand result and the Australian result rarely match. The ATO's instructions leave interest and borrowing costs out of the foreign rental figure and have you claim them at Other deductions. The interest still counts; it sits at a different label and reduces your Australian taxable income even in a year when New Zealand's ring-fencing has carried the loss forward.

The Australian return also asks whether you held overseas assets worth AUD 50,000 or more at any time in the year. A New Zealand house almost always means yes.

The negative gearing limits that start on 1 July 2027 don't apply to properties held at 7:30pm AEST on 12 May 2026. If you owned the New Zealand rental then, that change leaves it alone.

Selling: the New Zealand side

The first New Zealand question is the bright-line test. For residential property sold on or after 1 July 2024, any profit is taxable if the sale happens within two years of the bright-line start date. That date is usually when the title transferred to you, and the end date is usually when you sign a binding sale agreement. There is an exclusion if you lived in the property as your main home for more than half of that period and used more than half its area as your home.

Outside the two years, New Zealand can still tax the sale under its other land rules, for example if you bought intending to resell. If you are an offshore person and the sale is caught by the bright-line test, residential land withholding tax is deducted at settlement by the conveyancer unless you hold an exemption certificate.

Selling: the Australian side, where your arrival date sets the cost

When you become an Australian resident, other than as a temporary resident, the ATO treats you as having acquired your overseas assets on that day at their market value. If you were a temporary resident first, the same thing happens on the day you stop being one. The cost base of the New Zealand house for Australian capital gains tax is what it was worth on that date, not what you paid for it. Growth before then is outside Australian tax. Growth after it is not. Assets acquired before 20 September 1985 are excluded from this rule.

That market value is also the record that is hardest to recreate years later. Get a registered valuer's valuation as at the date you became resident, while comparable sales from that time are easy to find, and convert it at that day's exchange rate. The sale price is converted at the rate on the day of sale, so the exchange rate alone can add to the gain or take from it.

If New Zealand doesn't tax the gain, there is no New Zealand tax to offset, and Australia taxes it under its own rules. Those change from 1 July 2027. For individuals, trusts and partnerships the 50% discount is replaced by cost base indexation and a 30% minimum tax rate, and the change applies only to gains that accrue after that date. If you expect to sell after 1 July 2027, evidence of the property's value around that date is worth having.

If the house was your home before you moved, don't assume the Australian main residence exemption covers it now. Whether any of it applies depends on how you used the property after you became resident, and that needs advice before you sell.

What to keep

• The date you became an Australian resident, and the visa, residency or citizenship paperwork that shows it.
• A valuation of the property as at that date, and the exchange rate on the day.
• The original purchase settlement statement, which New Zealand may still need.
• Monthly statements from the property manager, and loan statements showing interest.
• Each IR3NR you file and each New Zealand assessment, as proof the tax was paid.
• The exchange rates you used each year and their source.

When to get advice

Get advice in the year your visa or your partner's status changes, before you refinance or redraw against the New Zealand loan, and before you list the property. Each changes a number that is hard to fix later. Australia–New Zealand tax is a speciality of the practice: see our Trans-Tasman taxation service. This article is general information, not advice for your circumstances. To have your own position looked at, get in touch.