No one likes paying tax, but with the right planning and structures in place, Kiwis can save thousands in tax in 2025. In our recent discussion with Matt Harris, we explored the importance of tidiness, smart property strategies, and tax-efficient structuring that could make a major difference to your bottom line.
The Power of Tidiness in Tax
When it comes to how to save thousands in tax in 2025, the first step is simply being organised. Clean, accurate records not only make life easier for your accountant but also ensure you capture every possible deduction. Having separate accounts for different properties or business activities, keeping receipts, and completing your financials on time all improve your chances of maximising legitimate claims.
This tidiness isn’t just about reducing your tax bill – it also builds trust with banks when applying for lending. Whether you’re growing a property portfolio or running a business, tidy books signal stability and increase your borrowing power.
Structures That Make a Difference
Another key way to save thousands in tax in 2025 is by reviewing your financial structures. Many Kiwis carry debt on their personal homes while investment properties remain underutilised for tax benefits. By restructuring lending, shifting debt to the investment property where interest is deductible, you could save tens of thousands over time.
Matt shared the example of a client with a $1 million mortgage on their own home and the same on an investment property. At a 6% interest rate, failing to restructure cost them around $20,000 a year in unnecessary tax. But a warning: these restructures need to be set up properly with professional advice – getting it wrong can cause more harm than good.
Don’t Overlook Chattels Valuations
One often-missed opportunity for property owners is a chattels valuation. Chattels include items like carpets, appliances, and dishwashers – anything not fixed permanently to the property. A professional valuation allows you to claim depreciation on these items, often adding up to $5,000–$6,000 in tax savings over time. It’s the only non-cash deduction still available, making it a worthwhile step for investors.
The Importance of Reviewing Your Structures Regularly
Structures that worked in the past may no longer be effective. For example, look-through companies (LTCs) and trusts are set to make a big comeback in 2025 and beyond, as investors seek better ways to manage cash flow and liability. Regularly reviewing your setup ensures you’re not stuck with outdated strategies that cost you more in tax than necessary.
Key Takeaways
-
Stay tidy: Keep accurate, well-organised financial records to maximise deductions.
-
Restructure debt smartly: Ensure mortgages are set up tax-efficiently, particularly for investment properties.
-
Get a chattels valuation: Unlock thousands in depreciation deductions on household items.
-
Review your structures: Old setups may no longer serve you—LTCs and trusts are worth reconsidering.
-
Seek professional advice: DIY fixes can backfire; work with experts to ensure your strategy is sound.
Next steps:
At Lighthouse Financial, our accounting team can help you review your structures, tidy up your books, and create strategies that save you money in 2025.
If you’d like to learn more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
