Don't forget to pay tax on flatmate or boarder income
From Aaron’s YouTube: “Don't forget to pay your tax on flatmate or boarder income in New Zealand”
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Posted 6 January 2026
The short version
- Flatmate and boarder income is taxable and must be reported to the IRD.
- Boarders have a tax-free allowance of $230/week per person or $290/week per couple.
- Flatmates pay full tax on their rent but you can claim some expenses.
- Always consult an accountant to ensure your tax obligations are handled correctly.
Understanding taxable income from flatmates and boarders
If you have a flatmate or boarder living in your home, their payments to you count as taxable income. Many homeowners choose to take in flatmates to help with mortgage repayments, but it’s important to remember that this income is not tax-free.
A boarder is someone who pays for accommodation, food, and other expenses, while a flatmate simply pays rent and manages their own costs. The distinction between the two is crucial for determining how much tax you owe.
Tax-free allowances and expense claims
Boarders benefit from a tax-free allowance of $230 per week for a single person or $290 for a couple. If you charge $300 per week to a single boarder, you only need to pay tax on $70 of that income.
Flatmates, however, do not qualify for a tax-free allowance. If you charge $300 per week to a flatmate, you must pay tax on the full amount. That said, you can claim back some expenses related to their stay, such as mortgage costs or utilities.
Why consulting an accountant is essential
Tax rules for flatmate and boarder income can be complex, and navigating them correctly requires professional advice. An accountant can help you assess your tax obligations and ensure you’re claiming the right deductions.
While this video provides a basic overview, Aaron emphasises that he is not an accountant and recommends seeking expert guidance to stay compliant with tax laws.
This is general information, not personalised financial advice. For advice on your situation, talk to Aaron.
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