Verified for 2026 Tax Year

GST on Mixed-Use Assets

Do you use your bach or boat for both business and private fun? Master the "Mixed-Use Asset" apportionment rules to claim the right amount of GST.

The 10-Second Rule

If you use a high-value asset for both income generation and private enjoyment, you must apportion your input tax deductions. You can claim GST on expenses related to **income-earning days** at fair market value, but you cannot claim GST on expenses related to **private days**.

1. What is a Mixed-Use Asset?

In New Zealand, "Mixed-Use Assets" are high-value items used for both business/rental income and private enjoyment. Common examples include holiday homes (baches), private jets, and boats over 7 meters.

The Inland Revenue Department actively monitors these assets because they are high risk for improper input tax deduction claims.

The 62-Day Threshold:

If an asset (like a holiday home) is unused for more than 62 days in a year, and it has both private and income-earning use, it falls strictly under the mixed-use asset apportionment rules.

2. The Three Types of Days

To calculate your GST claim, you must track every day of the year. The IRD categorizes days into three buckets:

💰

Income-Earning Days

Days when the asset is rented out to third parties at a fair market value.

🏠

Private Days

Days when you, your family, or friends use it for free or at "mates rates" (below market value).

⏳

Unused Days

Days when the asset is sitting empty but actively available for rent.

3. How to Apportion GST

For expenses that are 100% related to earning income (e.g., Airbnb advertising fees), you can claim 100% of the GST. For expenses that are 100% private, you claim 0%.

For shared costs (like insurance, power, or general maintenance), you must use the apportionment formula:

( Income Days ÷ Total Used Days ) × 100

= Claimable GST Percentage

Example: The Holiday Home

You own a bach. Over the year, it is:
- Rented out for 60 days (Income-Earning)
- Used by your family for 40 days (Private)
- Empty for 265 days (Unused)

Total used days = 100. (60 ÷ 100) = 60%. You can claim 60% of the GST on the shared costs like rates and insurance.

4. The End of Year "Wash-Up"

Throughout the year, you estimate your percentage in your regular GST returns. However, you must perform a 'wash-up' calculation at the end of your financial year.

This wash-up ensures the GST you claimed throughout the year matches the actual, finalized percentage of business use based on your complete logs. Failing to do this can lead to an Inland Revenue Department audit adjustment.

Frequently Asked Questions

Can I claim GST on my holiday home expenses?

Yes, but only in proportion to the time it is rented out to third parties at market rates. You must exclude any days you or your family use the property.

What if I rent my boat to a friend at a half-price 'mates rate'?

The IRD treats 'mates rates' as private use. To count as a business day, the rent must be at a Fair Market Value.

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