Tired of paying so much tax? Have you considered renting out your tools, machinery, clothes, surf board, cameras or any other items you own on Sharehub? It’s a great way to earn extra cash, but it’s important to understand your Inland Revenue (IRD) tax obligations. This guide explains when and how to declare your rental income, whether you need to register for GST, and if expenses like purchase costs/depreciation and office/storage space as well as utility bills can be claimed as tax deductions. We’ll keep it simple and straightforward – helping you stay on the right side of the IRD while maximising your returns!

Some of the key benefits to purchasing items, and listing them on Sharehub include:

• Claiming back the cost of the item as a business expense (Depreciation). In addition, new laws introduced on the 22nd May enable businesses to immediately deduct 20 percent of the cost of a new asset, on top of depreciation.
• You can claim a portion of your home, mortgage, rent, power, fuel and any other related expense to reduce your tax obligations, and make the item pay for themself!

Declaring Rental Income to IRD

When you rent out personal items (like equipment, vehicles, or gadgets) and earn fees, that money is considered taxable income. In New Zealand, any income you earn from renting out an asset must be declared in your income tax return, regardless of whether it’s a one-off or regular activity. Here’s what you need to know:

• Include it in your tax return: You’ll need to report the rental income in your annual tax return (IR3 for individuals). Even if you don’t usually file a return (for example, if you only have salary or wages taxed at source), earning untaxed rental income means you should file a return and declare this income . The IRD requires you to declare all income you receive from renting out assets .

• No minimum threshold: There’s no “safe” amount you can earn tax-free from rentals – even small, occasional earnings must be reported . For example, if you made $100 renting your lawnmower, that $100 still needs to be declared on your tax return.

• Jointly-owned items: If you share ownership of an item (e.g. a trailer owned with a friend) and rent it out, each owner should declare their portion of the income and any related expenses, proportional to their ownership share .

• When to declare: Rental income is declared for the tax year in which it’s earned (the NZ tax year runs 1 April to 31 March). Tax returns are typically due by 7 July each year (if you use an accountant or tax agent, you may have an extension). Be sure to include your rental earnings and allowable deductions for that year.

Friendly tip: Declaring your side income is important to avoid surprises. If the IRD later finds undeclared income, you could face back taxes or penalties. It’s best to report it upfront, and considering you’re allowed to deduct expenses, you’ll only pay tax on the profits, not the gross income.

Casual Side Income vs. Running a Business

You might wonder if your occasional rentals make you a “business” or if it’s just a hobby. The distinction matters for tax purposes:

• Hobby or occasional income: A hobby is something you do for fun with no intention to make a profit. If you occasionally make a bit of money from a hobby (for example, selling a few homemade crafts to friends), that money might not be considered taxable income. However, purely lending or renting out assets for a fee is generally not a hobby – it’s usually done to make income.

• A side hustle can be a business: In the eyes of the IRD, you don’t need to be a formal company to be “in business.” If you regularly provide goods or services (like renting out items) with the intention to make a profit, you’re likely running a business for tax purposes. Key signs of a business include:

  • Intending to make a profit (even if it’s on the side)

  • Renting out items to the public on a regular basis (not just a one-off)

  • Putting significant time, effort, or money into this activity (e.g. buying gear specifically to rent out)

  • Keeping records of income and expenses like a business would

  • Relying on the income to supplement your finances in a meaningful way.

• Why it matters: If your renting activity is considered a business, you must pay income tax on your net profits (after expenses), just as any business would. The good news is you can also claim related expenses (covered in the next section). Failing to report business income can lead to penalties, so it’s important to get this right. If you’re ever unsure whether your situation counts as a business, it’s best to declare it or check with a tax advisor/accountant.

In short, a casual one-time/irregular rental might not make you a “business,” but "frequent" or profit-focused renting is very likely taxable business activity. Most Sharehub users earning side income will fall into the taxable category, even if it’s not a full-fledged company.

GST (Goods and Services Tax) – Do You Need to Register?

New Zealand’s GST is a 15% tax on most goods and services. Whether you need to worry about GST for your rental side income depends on how much you earn:

• GST registration threshold: You must register for GST if your total income from taxable activities (including renting out items) is more than $60,000 in any 12-month period . This is a rolling period – not just the calendar or tax year. For example, if between May and the following April your rental earnings (plus any other business income) exceed $60k, you’re required to register for GST.

• Below the threshold: If you earn less than $60,000 in a 12-month span, GST registration is not required. Most casual sharers and side-hustlers won’t hit this threshold. You can choose to register voluntarily, but keep in mind this adds complexity (you’d need to add 15% GST on rentals and file GST returns regularly).

• After registering: If you do become GST-registered, whether because you crossed the threshold or opted in, you’ll need to add GST to your rental charges. For example, if you charge $50 for a rental, it becomes $50 + $7.50 GST = $57.50 for the renter. You’ll periodically pay that collected GST to IRD via GST returns. The upside is you can claim back GST on expenses related to your rental activity . For instance, if you buy a new camera to rent out for $1,150 (including $150 GST), you could claim the $150 as a credit. (If the asset is used partly for personal use, you only claim the business portion of the GST – more on splitting expenses below.)

• Using an existing GST number: If you’re already GST-registered for another business or job (say you’re an IT contractor who charges GST), you don’t need a separate GST registration for your rental side gig. Use the same GST registration to report your Sharehub income and expenses. All your business activities together determine the $60k threshold.

• No GST on truly private casual deals: If you’re just loaning something to a friend for a bit of petrol money (and you’re not GST-registered), there’s obviously no GST to consider. GST only enters the picture when you are registered and making taxable supplies. If you stay under the threshold and don’t register, you don’t charge GST on your rentals – but you also can’t claim GST back on your costs.

Quick example: If you earned $10,000 this year renting out various tools, you wouldn’t need to register for GST (since $10k < $60k) – you simply declare the $10k as income on your tax return and pay income tax on the profit. If you earned $65,000, however, you would have to register for GST, start charging GST on rentals, and file GST returns (while claiming credits for GST on your expenses) .

What expenses can you claim?

Now for the exciting stuff! The great thing about earning income from renting out your stuff is that you only pay tax on your profits, not on the total income. To figure out your profit, you can subtract deductible expenses – any costs directly related to earning that rental income. IRD allows a range of business expenses for asset sharing, such as maintenance, office space, storage space, power, internet and even depreciation. Here’s how it works:

• Direct expenses you can deduct: Any expense that is incurred to earn your rental income can potentially be claimed as a deduction. Common examples include:

  • Maintenance and repairs – e.g. sharpening a rented chainsaw’s blade, fixing a trailer light.

  • Servicing costs – e.g. vehicle WOF or servicing costs if you rent out your car or van.

  • Fuel or power used in the item during rental (if you supply fuel or charge batteries for an electric tool).

  • Insurance specifically for the item – if you have insurance coverage for theft/damage while renting out, or an increased premium because you rent it .

  • Platform fees or commissions – any fees Sharehub charges you for listings or transactions are generally deductible in full . 

  • Advertising or listing enhancements – if you pay to promote your listing or any marketing for your rentals.

  • Registration or licensing fees – for vehicles/trailers, any registration or licensing costs proportionate to the rental use .

• Depreciation (the cost of your asset over time): The big one for many is the depreciation of the item you’re renting out. You likely bought a tool, appliance, or vehicle to use, and now it’s earning income, you’re allowed to claim a portion of its cost each year as it “wears out.” Depreciation is an expense that spreads the item’s cost over its useful life . For example, if you have a camera worth $2,000, you might claim maybe $300–$400 a year as depreciation expense (exact rates are set by IRD for different assets). Important points on depreciation:

  • If an item cost $1,000 or less, you can deduct the whole cost in the year you bought it. So if you bought a second-hand drill for $200 to rent out, you could expense that $200 immediately. But a $5,000 trailer would have to be depreciated over multiple years.

  • If the item was something you already owned personally and you started renting it out, you should establish a reasonable market value for the asset at the time it entered your “business” use, and depreciate from that value. This can get a bit technical – if unsure, a tax advisor/accountant can help – but the concept is you can’t depreciate the full original cost if you’ve already used it privately for years. You’d base it on the value when you began renting it out.

  • Depreciation rates: IRD provides schedules for how fast different assets depreciate (some items like electronics depreciate quickly, vehicles a bit slower, etc.). You can use either the diminishing value method (higher depreciation in earlier years) or straight-line method (even depreciation each year). Over the life of the asset, both methods deduct a similar total amount – it’s just about timing. You can find these rates on IRD’s website or use their depreciation calculator.

  • When you sell or stop using the asset: If you eventually sell the item or stop renting it out, there may be a "depreciation recovery" or loss to consider (for instance, if you sell it for more than its depreciated value, the excess might be treated as income). This is getting deep into tax territory – for most casual users it’s not a huge concern, but be aware there could be a tax adjustment when an asset’s life in your business ends.

• Home office or storage space: If you store rental items at home, you can claim a portion of your home’s costs as a business expense, such as utilities, rent, or mortgage interest, depending on how much space is used for your rental activity. For example, if you rent out a posthole digger and keep it in your garage, you could claim a portion of the electricity used to light the garage or a percentage of your rent or mortgage based on the square footage of the space used. Keep in mind that only the proportion of home use for your rental business is deductible. If you use your entire home for personal activities, you’ll need to apportion the costs accordingly.

• Private vs business use (apportionment): It’s common to use your item both personally and for rentals. You can only deduct the portion of an expense that relates to the income-earning use. For instance, if you use your camera 80% for personal family photos and 20% for rentals, you should only claim 20% of the applicable expenses (like insurance or depreciation) as business deductions. IRD expects you to keep a reasonable method of splitting these costs. You might track the days or hours the item was rented vs. personal use, or some other fair apportionment .

• New tax laws already in effect mean that Businesses can immediately deduct 20 percent of the cost of a new asset, on top of depreciation!

Key Takeaways

• All rental income is taxable – if you earn money by renting out personal items, include it in your tax return . There’s no blanket exemption for “casual” income.

• Hobby vs business: A truly one-off or hobby activity might not be taxed, but in most cases using Sharehub or similar platforms for profit will be considered business activity by IRD.

• Businesses can immediately deduct 20 percent of the cost of a new asset, on top of depreciation.

• Keep an eye on GST: You only need to register for GST if your annual rental (and other business) income exceeds $60,000.

• Claim expenses to reduce your tax: You’re taxed on profit, not gross income. Claim legitimate expenses like fees, maintenance, insurance, storage, and depreciation. Just only claim the business-use portion of any cost.

• Stay organised: Keep records of your earnings and expenses for 7 years. It makes filing taxes easier and protects you if IRD has questions.

Renting out your personal items can be rewarding and fun, and with a little attention to these tax basics, you can keep it stress-free too. By understanding your obligations and rights (like expense deductions), you ensure that you enjoy your extra income and stay compliant. When in doubt, refer to official IRD resources or seek advice – but hopefully this info sheet has equipped you with the essentials to confidently manage your Sharehub earnings. Please feel free to reach out to us if you have any specific questions. Happy renting and sharing!

Sources: This guide is based on official New Zealand Inland Revenue guidance on sharing economy income and tax obligations , as well as related NZ tax resources for small business and hobby income. Be sure to check the IRD website or consult a tax professional for the latest updates or personal advice.