Working for families - rent as income?!
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Forum Name: General Chat
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URL: https://www.ohbaby.co.nz/forum/forum_posts.asp?TID=15804
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Topic: Working for families - rent as income?!
Posted By: arohanui
Subject: Working for families - rent as income?!
Date Posted: 30 March 2008 at 2:13pm
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My paid parental leave will be finishing soon, so we're having a look at working for families.
On the website it says that rent is classed as income, which does not make any sense to me!! Here's the deal: DH earns 40,000 at the mo, hopefully going up to about 45,000 soon (that would be max though). We rent in Auckland, but own a property up north that we rent out to DHs mum ($200 a week). We have to top this up in order to pay our mortgage, so in fact we're making a loss in the short term (ie the rent doesn't totally cover the mortgage). How can they count this as income?! That just seems so unfair to me!! The whole reason we bought up north was cos we couldn't afford to buy in aucks because house prices are so ridiculous. So at the mo we're paying rent and mortgage just so we could get into the house market. Which we don't have an issue with, it was our choice, but doesn't seem fair that they count that as 'income', Has anyone had any experiences with this? Is it worth setting it up as a trust or something, so they can't count that? Would that even work? Oh wait just read that you also have to include income from any trusts too. Or is there a way we can get around it because it's DH's mum paying us? If we go by the actual income, the estimate of what we're entitled to is $100 a week. But if they count rent as income, it drops down to $61. That would make a big difference to us. Also what's the deal with accommodation supplement? Can you get both? Any experience/advice is much appreciated. TIA  ------------- Mama to DS1 (5 years), DS2 (3 years) and... http://alterna-tickers.com" rel="nofollow"> 
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Replies:
Posted By: caliandjack
Date Posted: 30 March 2008 at 2:23pm
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I'd recommend you talk to an accountant with experience in tax and property.
Rent is considered a form of income, but as your mortgage is above what the property is earning in income, you would normally claim the loss when you do your annual tax. ------------- http://lilypie.com" rel="nofollow">   [/url] Angel June 2012 |
Posted By: peanut butter
Date Posted: 30 March 2008 at 2:44pm
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If your rental runs at a loss it will actually reduce your income. We have a rental property and rent- expenses (interest, rates, maintenance, depreciation etc) = a loss so our incomes are reduced.
I'm not sure how to do this but if you know roughly how much of a loss you will get you could build that into the calculation for your estimated income. We havent taken our rental property into consideration at all and just estimated off our salaries. That way we might get a little back after end of year (tomorrow...YAY) |
Posted By: Maya
Date Posted: 30 March 2008 at 2:45pm
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I have no idea about rental income, but if you're making a loss in theory it's not income is it? I agree with Fleury tho, check with an accountant, or maybe call the IRD (and hope you get someone half useful!).
And if you qualify you can get WFF and the accomodation supplement, it just depends on your income level. -------------  Maya Grace (28/02/03)
 (02/01/06)
The Gremlins:Sienna Marie & Mercedes Kailah (14/10/06)
Lil miss:Chiara Louise Chloe (09/07/08)
Her ladyship:Rosalia Sophie Anais (18/06/12)
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Posted By: Kellz
Date Posted: 30 March 2008 at 3:28pm
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We have the exact same thing Liz. We own 2 houses under the same mortgage ( they are on the same title), and rent one out, but the rent doesnt cover the mortgage so we still top up more than 1/2 of our total mortgage ourselves.
We give our bank statements, proof of mortagge, rates, expenses etc to our accountant and they work it out, so on the forms we end up writing a negative ammount of $$ where the "rent recieved" goes, which shows we are running at a loss,...so the rent doesnt make your income go up higher, meaning u lose out on the WFF. Hope that makes sense! |
Posted By: arohanui
Date Posted: 30 March 2008 at 3:37pm
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Yay I'm glad they can actually show it's running at a loss - I thought they didn't take expenses into account. Yay! DH will be pleased too when I tell him.
Thanks everyone, we will organise to have a sit down with our accountant I think. ------------- Mama to DS1 (5 years), DS2 (3 years) and... http://alterna-tickers.com" rel="nofollow">
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Posted By: Our_Lexis
Date Posted: 30 March 2008 at 4:04pm
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Hey Arohanui,
Im on 6mnths Paid Parental Leave at the mo also, runs out at enda Apr then we will be living on my prtnrs wages & love only as we fall between the threshold for any extra supplementary assistance. Anyways yes you can apply for both WFF & Accommodation Supp at the same time although its more then likely you wont qualify at present due to your current income (parental leaves classed as income, also W&I would class your rent from mortgage as income too). Hope this helps as I am a Work & Income employee although I do Administration so not an expert in benefits but know abit!! 
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Posted By: Bombshell
Date Posted: 30 March 2008 at 6:05pm
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why have you not put a rental property into an LAQC - then it is not rent to "you" but to the company and you can look at claims back on your tax that way too
OR at least into a family trust and then look at the write off whenrenting to a family member...you need to talk to an accountant RENT is income.....you just need to set it up properly to avoid it being YOUR income.... |
Posted By: busymum
Date Posted: 30 March 2008 at 8:10pm
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WINZ can be fussy at times, it depends whether they are talking about 'net profit' or 'income'. I think you would probably be ok for IRD (working for families) but you might get hung on the issue with WINZ.... but I haven't had personal experience on this one. Do you usually calculate rental income vs expenses for your IR3? If so that's what your working for families credits (IRD) will be calculated off. WINZ words everything a bit differently too. For example WINZ counts boarder payments as income but if you only have one, IRD don't count it as income. Weird ay
Does anyone know, if you are on maternity leave and your DH doesn't work (nor on benefit, usually SAHD), do you miss out on the in-work payment? ------------- |
Posted By: mummy_becks
Date Posted: 30 March 2008 at 8:47pm
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I think you might Teresa as you don't curently have anyone working more that 30 hours a week outside of the home. OMG I so didn't even think about this for when we rent our place. We will be renting it at a lose as we will be topping up the mortgage payments damn. ------------- I was a puree feeder, forward facing, cot sleeping, pram pushing kind of Mum... and my kids survived! |