Deductibility of healthy home costs for rental properties

Inland Revenue has released guidelines on the deductibility of costs incurred when working to meet the Healthy Homes Standards.

The new standards, which set out the minimum requirements for landlords, came into effect on 1 July 2019. The standards include installing fixed heaters in the main living room; smoke alarms; ceiling and underfloor insulation; and ground moisture barriers for some properties.

Expenditure is classified into three categories:

  •  Immediately deductible revenue expenditure.
  • Capital expenditure that forms part of the building and is unable to be deducted immediately but may be depreciable.
  • Capital expenditure that does not form part of the building and is likely to be depreciable.