If a residential property investor (or their Company or Trust) has tax to pay of more than $2,500 in each year, they may need to pay Provisional tax.

Provisional tax is a way of paying tax as income is received.  It’s paid in three instalments during the year – July, November and March (assuming a 31 March balance date).

The amount of provisional tax you pay is based on your expected profit for the year. At the end of the year the difference between the amount you paid and the amount you should pay, based on your actual profit for the year, is calculated and you either receive or pay the difference.

You can download the IR’s Provisional tax basic information document from their website.

This material is for information purposes only. You should seek professional advice related to your individual circumstances. While The National Bank has taken care to ensure that this information is from reliable sources, it cannot warrant its accuracy, completeness or suitability for your intended use. To the extent permitted by law, The National Bank does not accept any responsibility or liability arising from your use of this information. Our lending criteria, terms, conditions and fees apply.