Home Office Expenses for NZ Landlords: What You Can Claim

Most of the costs of a rental property are easy to identify: the rates, the insurance, the repairs. Fewer landlords think about the cost of running the rental from their own home. If you keep the records, deal with the tenants and organise the maintenance from a desk at home, part of your household costs may be claimable.

This guide explains who can claim, the two ways to work out the amount, and how to keep the claim defensible. It uses Inland Revenue's published rates as at August 2026. It is general information, not tax advice.

Who can claim

You can claim home office expenses if you are legitimately using part of your own home to run your rental business. That might mean:

• keeping the property's accounts and records
• dealing with tenants, applications and enquiries
• organising maintenance and tradespeople
• reviewing statements and preparing for your tax return.

The claim needs to reflect real use. If your property is fully managed and your involvement is reading a monthly statement, your home office use is small, and a large claim will not stand up. Inland Revenue is known to check home office claims, so only claim what you can show.

Method one: the proportion of floor area

The standard method splits your household costs by floor area.

1. Add up your household costs for the year. These can include rates, house insurance, power, and either rent or mortgage interest. Mortgage principal is never included.
2. Measure your home's total floor area in square metres.
3. Measure the office area used for the rental business.
4. Divide the office area by the total area. That percentage is the share of your household costs you can claim.

If the office is also used for private purposes, the claim needs to reflect the time it is used for the rental too, not just the space.

Method two: the square metre rate option

If part of your home is set aside and used mainly for the business, you can use Inland Revenue's simpler square metre rate option instead.

The rate covers utilities such as power and heating. Inland Revenue sets it each year from the average cost of utilities per square metre of housing for the average New Zealand household. For the 2025–26 tax year, it is $57.30 per square metre. Inland Revenue publishes each year's rate, so check you are using the right one for your return.

The rate does not include mortgage interest, rates or rent. You claim a floor-area share of those separately. Inland Revenue's formula is:

(a × b) + (c × d)

Where:

• a is your total mortgage interest, rates and rent for the year
• b is the office area divided by your home's total floor area
• c is the office area in square metres
• d is Inland Revenue's square metre rate for the year.

If you use this option, you cannot claim any other expenses or depreciation for the business use of your home.

A worked example

Anna owns a 150 square metre house in Auckland and uses a 10 square metre room mainly as the office for her two rentals. For the 2025–26 tax year, the mortgage interest and rates on her home came to $24,000.

Using the square metre rate option:

• b = 10 ÷ 150 = 6.67%
• a × b = $24,000 × 6.67% = $1,600
• c × d = 10 × $57.30 = $573
• Total claim = $2,173

That amount is a rental expense, deducted from her rental income.

Phone, internet and travel

Some other costs of running the rental from home can be claimed too:

• Internet. If your plan is used for both private and business purposes, you can claim a fair and reasonable business share.
• Phone. If you have a separate line for the rental, its cost is deductible. If you use your private landline, Inland Revenue allows 50% of the line rental, and business calls are fully deductible.
• Travel associated with managing your property, such as visiting it to meet a tradesperson, may also be claimable.

Keep records that show how you worked out each business share.

How it fits with your other rental expenses

Home office expenses are rental expenses, so they are subject to the same ring-fencing rules as the rest. They can only be used against rental income, and any excess is carried forward.

The share of your home mortgage interest you claim here is separate from the interest on your rental property loans, which is covered in our guide to interest deductibility.

Keep the claim defensible

• Measure the space and keep a note of the measurements.
• Keep the household bills used in the calculation.
• Use the space as you say you do. A desk in a spare room used mainly for the rental is fine; a dining table occasionally cleared for paperwork is not the same thing.
• Recalculate each year, because rates, interest and the square metre rate all change.

Inland Revenue's page on using your home for your business sets out both methods and lists the square metre rate for each year.

Less admin, smaller claim

The less time you spend running the rental from home, the smaller this claim, and that is usually a good trade. If you are spending your evenings on tenant messages and tradespeople, it may be worth looking at what a property manager would take off your plate. Their fees are deductible, as our guide to whether property management fees are tax deductible explains. Start with our process, or request a free rental appraisal for an up-to-date view of what your property could earn.

For the full list of what landlords can claim, see our guide to claimable landlord expenses, and our guide to keeping records for landlord tax.