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Are gifts to tenants tax-deductible?

3 December 2022

With holidays coming up, some landlords wonder, do I get my tenants anything?

It's up to you

Firstly there is no requirement to buy your tenants anything. But is there an expectation? There is no clear answer, and it's hugely personal and also depends on your relationship with the tenant.

Yes, tenants have an obligation to look after your place and pay rent on time. But you can choose to show your appreciation by giving small gifts to reward good behaviour or use it as an opportunity to improve your relationship with tenants.

Can I claim it on tax?

Generally speaking, gifts to tenants would be tax-deductible. BUT this depends on what the gift is.

If your gift contains food or drink (e.g. a bottle of wine, a hamper with food, or a box of chocolates), you can only claim a 50% deduction.

A non-edible gift like a gift card, flowers, or movie tickets can be deducted in full.

While offering a free week's rent is a lovely idea. Unfortunately, it's also not tax deductible.

Alternatively, you can consider offering the tenants a new appliance if the current one is to be replaced. It makes for an excellent gift for tenants that will surely be appreciated and also improves the value of your property.

If your property manager is doing a good job and you choose to send them a gift, this expense is also likely to be tax-deductible.

A small gift can make a big statement to your tenants and allows you to connect with your tenants in a new way.

We recommend you always seek independent tax advice regarding financial matters. The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. does not accept any liability that may arise from the use of this information.

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What the community has to say
  • AJ

    Surely, if you do not receive rent for the last week of the year, it is by default, tax deductible. As you have not received it therefore you will not be taxed on it?

  • CT

    Technically if you give one week's free rent, you are not paying tax on that week's income (as you did not earn it). So it is not tax deductible. It is non-taxable!

    If your tenant's are not your employees, a small gift or food & drink is fully deductible too. The Entertainment Expenditure rules for employees, do not apply to tenants, nor do fringe benefit tax rules.

  • BH

    It baffles me how kiwi landlords want to get caught up in this gifting thing. A tenancy agreement is a business agreement between two adults. I make sure that I perform all my obligations as a landlord. It is a professional relationship where boundaries are important for it to function smoothly. Giving gifts to my tenants would break boundaries and send all sorts of unhelpful messages. If I were a tenant I would no more expect a gift from my landlord than I would from my electricity supplier. Giving gifts can even be experienced as manipulative in that you are making it more uncomfortable for the tenant to let you know about repairs etc. I encourage landlords to refrain from giving gifts and just focus on being as professional a landlord as you can be.

  • KD

    Exchange of gifts happens in lots of professional relationships. It happens so often that businesses have gift policies. Gift-giving and professionalism aren't mutually exclusive. Being professional doesn't mean rigidly following a contract and showing no humanity.
    Whenever I pay my mechanic bill I get a chocolate bar. Suppliers take me out for lunch. It all serves as a gesture of goodwill, and if it is received poorly or taken at more than face-value, that says more about the receiver than the giver.
    I recommend getting to know your tenants to see if they will appreciate a gift, and if so give freely. I do so with my tenants and it only strengthens the relationship. Birthday wishes, a gift for the new baby, a Christmas basket. Less than $100 is worth it for the ongoing harmony and stability of the tenancy, and shows I value my tenants as people first, rather than cash cows.
    (Fun fact - my electricity supplier sent me a tea-towel. Many give free hours of power.)

  • AH

    You've all made valid comments above, thank you. Personally I used to give a gift of around $50 to my tenants but I got burned by thr last two groups and it leads me to belive the gift makes no difference they think of themselves first. I think you can build a rapport and effective landlord/tenant relationship without gifts. I won't give gifts again. I think being fair and kind is sufficient.

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