Issued
2018

2018 square metre rate for the dual use of premises

This article provides detail of the 2018 square metre rate for the dual use of premises. This rate is set in accordance with section DB 18AA of the Income Tax Act 2007.

For the purposes of section DB 18AA(5) of the Income Tax Act 2007, the Commissioner advises that the square metre rate for the 2017 - 2018 income year is $41.10 per square metre.

Notes to the 2018 square metre rate

Section DB 18AA(5) of the Income Tax Act 2007 requires that the Commissioner must from time to time set and publish square metre rates.

In Tax Information Bulletin Vol 29 No 4 (May 2017) the Commissioner advised that this square metre rate will be:

  • set by Inland Revenue, based on the average cost of utilities per square metre of housing, but excluding mortgage interest and rates or rent; and
  • updated each year.

Section DB 18AA received Royal assent on 21 February 2017, with effect from the 2017 - 2018 and later income years.

Using information obtained from Statistics New Zealand, the Commissioner has calculated the average annual cost of utilities for the average sized New Zealand household (gas/electricity, telephone/mobile/internet services, and house/contents insurance) and divided this sum by the average square metre size of a New Zealand house1.

Tax Information Bulletin Vol 29 No 4 (May 2017)2 provides further information regarding the use of the square metre rate. 


1 from information available from Quotable Value Limited
2At [73]