# New Zealand Architectural Designer, Draftsperson & Engineering Consultant Tax Guide: IRD IR3, 15% GST, Council Disbursements & Stage Invoicing (2026–27)

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- **Jurisdiction / Region:** NZ
- **Last Verified:** Fri Nov 06
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- **Summary:** NZ architectural designer, LBP draftsperson & engineering consultant IRD IR3 & 15% GST tax guide (2026–27): council BC disbursements, $1k assets & $0 app.

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# New Zealand Architectural Designer, Draftsperson & Engineering Consultant Tax Guide: IRD IR3, 15% GST, Council Disbursements & Stage Invoicing (2026–27)

**Short answer: Under 2026–27 architectural designer tax NZ rules, self-employed New Zealand architectural designers (LBP Design), freelance CAD/BIM draftspeople, structural/geotech consultants, and quantity surveyors report concept-to-consent stage fees on IRD Form IR3 and IR10 (BIC M692100). Once turnover exceeds $60,000 NZD, you must charge 15% GST on design fees and marked-up subconsultants while separating pure Council Building Consent (BC) fee disbursements, write off hardware under $1,000 NZD immediately, and claim $1.17/km Tier 1 site-visit mileage.**

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Across Auckland, Christchurch, Wellington, Tauranga, and Queenstown, thousands of independent **Licensed Building Practitioners (`LBP Design 1, 2 & 3`)**, **architectural designers**, **freelance CAD/Revit draftspeople**, **structural and geotechnical engineers**, and **quantity surveyors (`QS`)** run sole-trader practices.

Architectural and engineering practices in New Zealand deal with a billing structure that frequently trips up general accounting templates: **4-stage project billing** (`Concept → Developed Design → Building Consent Documentation → RFIs & Contract Observation`), **Council Building Consent (`BC`) and Resource Consent (`RC`) application fees**, **LINZ title/LIM searches**, and **sub-consultant coordination markups (`10%–15%` on structural/geotech reports)**. Here is the official 2026–27 [Inland Revenue (IRD)](https://www.ird.govt.nz/Search-results?q=sole+trader+expenses) tax and `15% GST` guide.

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## How does 15% GST apply to Council Building Consent fees, LINZ searches, and sub-consultant markups in New Zealand?

Once your gross turnover exceeds (or is expected to exceed) **`$60,000 NZD` in any 12-month period**, you must register for **[15% New Zealand GST](/keel/nz-how-to-calculate-gst/)** under the *Goods and Services Tax Act 1985*.

When you lodge a Building Consent (`BC`) via Simpli or Auckland Council / Christchurch City Council on a client's behalf, or coordinate a structural engineer's `PS1` producer statement, how you re-bill those outlays changes your GST calculation:

| Project Outlay / Line Item | IRD Classification (`GST Act 1985 s 8 & s 60`) | How to Invoice the Client | How It Reports on Your IRD GST Return (`GST101A`) |
|---|---|---|---|
| **1. Architectural Design, CAD Drafting & Observation Stages (`Concept, Developed, BC Set, RFIs`)** | Core taxable professional service | Charge **`+15% GST`** on every stage invoice (if on the **Payments Basis**, you only pay the `15%` GST to IRD in the period the client pays your invoice) | Include in **Box 5 (`Total sales and income`)** |
| **2. Council Building Consent (`BC`) / Resource Consent (`RC`) Fee Paid Directly by Client (or by You Strictly as Client's Agent at Exact Cost)** | **Pure Agency Disbursement:** The Building Consent application is legally in the **property owner's name**, and you either forward the council's invoice to the client to pay directly or pay it strictly as their agent and pass it through at exact GST-inclusive cost without markup | Itemize on a separate line at the bottom of your invoice: *`Disbursement Paid as Agent: Auckland Council Building Consent Deposit (Council Tax Invoice Attached in Owner's Name) = $4,250.00 (No additional GST)`* | Excluded from your Box 5 sales and Box 11 purchases (the homeowner/developer claims the GST if they are GST-registered) |
| **3. Structural Engineer (`PS1`), Geotech Report, orTopo Survey Contracted in Your Name + `10%–15%` Coordination Markup** | **Principal Supply / On-Charged Cost:** You engaged the engineer or surveyor in your practice's name and re-billed it with a `10%` management fee | Charge **`+15% GST`** on the **entire ex-GST re-billed amount plus your `10%` markup** (*e.g., `$2,000 ex-GST engineer fee + $200 coordination fee = $2,200.00 + $330.00 GST = $2,530.00 NZD`*) | Claim the engineer's `$300` GST in **Box 11 (`GST on purchases`)** and report the full `$2,530` (`$330` GST) in **Box 5** |

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## Which IRD IR3 and IR10 tax deductions apply to NZ architectural designers, draftspeople, and engineers in 2026–27?

On your [IRD Form IR3 and IR10 financial summary](/keel/self-employment-tax-calculator/), architectural design and drafting practices use **Business Industry Classification (`BIC`) Code `M692100`** (*Architectural Services*) or **`M692300`** (*Engineering Design and Consulting Services*). Every `$1,000 NZD` of allowable business expenses saves **`$300 to $390 NZD`** in income tax and ACC earners' levies:

| Expense Category | IR10 / IR3 Category | 2026–27 IRD Rule & Audit Boundary (`Income Tax Act 2007 s DA 1 & s EE 38`) | Tax + ACC Saved per `$1,000 NZD` (`30%–39% Bracket`) |
|---|---|---|---|
| **Archicad, Revit, AutoCAD, SketchUp, Bluebeam, Masterspec & BRANZ Subscriptions** | **Other Expenses (`Software & Technical Subscriptions`)** | `100%` deductible (ex-GST): Archicad Solo/Teamwork, Autodesk Revit/AutoCAD, SketchUp, Enscape, Masterspec, BRANZ standards, NZS 3604 handbooks, and cloud storage | **`$300 – $390 NZD`** *(plus `15%` GST input credit)* |
| **LBP Design Licence Renewal, ADNZ / NZIA / Engineering NZ Dues & PI Insurance** | **Insurance & Professional Registration Fees** | `100%` deductible: MBIE Licensed Building Practitioner (`LBP Design`) annual renewal, ADNZ/NZIA membership, CPD courses, and **Professional Indemnity (`PI`) & Public Liability insurance** | **`$300 – $390 NZD`** |
| **Leica Laser Measurer, iPad, Calibrated Monitor & Office Gear (`<= $1,000 NZD ex-GST`)** | **Low-Value Assets (`ITA 2007 s EE 38`)** | Under **s EE 38**, any separate asset costing **`$1,000 NZD or less` (ex-GST if GST-registered)** can be written off **`100%` immediately** in the year of purchase! High-spec CAD workstations and Mac Studios costing **over `$1,000`** are depreciated at **50% Diminishing Value (`DV`) or 40% Straight Line (`SL`)** | **`$300 – $390 NZD`** |
| **A1/A3 Plan Plotting, LINZ Title/Cadastral Searches & Scale Models** | **Materials / Project Supplies** | `100%` deductible: commercial plan printing/plotting, Landonline/LINZ title and survey plan fees, and presentation supplies | **`$300 – $390 NZD`** |
| **Freelance CAD/BIM Contract Drafters & Specialist Sub-Consultants** | **Subcontractor Payments (` Box / IR348`)** | `100%` deductible. Note: if you pay an individual contract draftsperson under a schedular activity (`WT`), check whether Withholding Tax applies unless they hold a valid IRD exemption certificate or operate as a company | **Full pass-through deduction** |
| **Site Measures, Council Meetings & On-Site Observation (`$1.17/km` IRD Tier 1)** | **Motor Vehicle Expenses** | Use a **90-day IRD vehicle logbook** (valid for 3 years) to claim **IRD Tier 1 Kilometre Rates (`$1.17/km` petrol/diesel, `$1.08/km` EV, `$0.86/km` hybrid for the first `14,000` total annual km)**; then `$0.37/km` petrol (`$0.35` diesel, `$0.23` hybrid, `$0.20` EV) on Tier 2 km | **`$1,170 deduction per 1,000 Tier 1 km` (`$351–$456` tax saved)** |
| **Dedicated Home Drafting Studio (`Square-Metre Method`)** | **Home Office Expenses** | Deduct the floor-area percentage (`e.g., 14 m² studio / 140 m² house = 10%`) of rent or mortgage interest, council rates, house insurance, and power, plus **`50%` of home fibre broadband and mobile phone plans** | **`$1,800 – $4,800+ NZD/yr`** |

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## How should you structure a 4-Stage NZ Architectural Design & Building Consent Invoice (`Taxable Supply Information`)?

Under **Goods and Services Tax Act 1985 s 19E**, invoices over `$200 NZD` must provide complete **Taxable Supply Information (`TSI`)** including your **8- or 9-digit IRD/GST number**. Structuring your [NZ design quote and stage invoices](/keel/nz-quote-template/) across four clear milestones prevents unpaid variations during council processing:

1. **Stage 1 — Site Measure, Planning Check & Concept Design (`20%–25% Deposit Upon Engagement`):** Covers on-site laser measure, district plan daylight/recession-plane check, and 3D concept floorplans.
2. **Stage 2 — Developed Design & Sub-Consultant Brief (`25%–30% Due Upon Concept Sign-Off`):** Covers preliminary NZS 3604 framing/bracing layouts, window schedules, and briefing the structural/geotech engineer or QS.
3. **Stage 3 — Building Consent (`BC`) Documentation & LBP Certificate of Design Work (`35%–40% Due Prior to Simpli BC Lodgement`):** State clearly on your quote and invoice: *`Stage 3 invoice is payable prior to releasing the signed LBP Form 2A Memorandum (Certificate of Design Work) and lodging the Building Consent set on the Simpli portal.`*
4. **Stage 4 — Council RFI Responses & Construction Observation (`Hourly at $145–$185/hr + GST + Disbursements`):** Because council Requests for Further Information (`RFIs`) vary unpredictably in complexity, always exclude council RFI processing from your fixed Stage 3 fee and bill RFI hours transparently on Stage 4!

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## How do ACC levies and Schedular Tax (`WT`) work for NZ architectural designers and contract draftspeople?

As a self-employed architectural designer or engineering consultant (`BIC M692100 / M692300`), ACC invoices you annually under **CoverPlus** based on your net liable earnings on your IR3 return (or you can elect **ACC CoverPlus Extra** to lock in an agreed weekly compensation amount). Both your **ACC Earners' Levy / Work Levy invoice** and any **Income Protection insurance** with an agreed taxable benefit are deductible against your business income.

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## Worked example: 2026–27 IRD IR3 & 15% GST calculation for a Christchurch LBP Architectural Designer earning $118,000 NZD

Suppose a GST-registered Christchurch architectural designer (`LBP Design 2`) bills **`$118,000 NZD` ex-GST** (`$135,700` incl. `$17,700` GST) in 2026–27:
- **Gross Pre-GST Design Income:** **`$118,000 NZD`**
- **Documented Business Expenses (`$28,400 NZD` ex-GST + `$3,810` in Box 11 GST credits):**
  - **Archicad Solo, Bluebeam, Masterspec, BRANZ & Adobe (`ex-GST`):** `$5,420`
  - **Professional Indemnity (`PI`) Insurance, LBP Design renewal & ADNZ membership:** `$3,890`
  - **Freelance contract Revit draftsperson (`overflow BC detailing`):** `$8,500`
  - **Low-value assets (`<= $1,000` laser meter, iPad, A3 printer) + 50% DV depreciation on CAD workstation:** `$2,640`
  - **IRD Kilometre Rate Claim (`4,400` logged site-measure & inspection km at `$1.17/km` Tier 1):** `$5,148`
  - **Home drafting studio (`12%` of power, rates, insurance & mortgage interest + `50%` fibre/mobile):** `$2,802`
- **Net Taxable Profit (`IR3`):** `$118,000 - $28,400` = **`$89,600 NZD`**
- **2026–27 NZ Income Tax (`Updated 31 July 2024+ Brackets`):**
  - `$0 – $15,600` at `10.5%` = `$1,638.00`
  - `$15,601 – $53,500` at `17.5%` = `$6,632.50`
  - `$53,501 – $78,100` at `30.0%` = `$7,380.00`
  - `$78,101 – $89,600` (`$11,500`) at `33.0%` = `$3,795.00`
  - **Total Income Tax:** **`$19,445.50 NZD`**
- **Total Tax + GST Saved:** Claiming `$3,810` in Box 11 GST credits plus `$28,400` in IR3 deductions saves **`$13,182 NZD`** in combined income tax, ACC levies, and GST!

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## Frequently asked questions

**When must a New Zealand architectural designer or freelance draftsperson register for 15% GST?**
Under the **Goods and Services Tax Act 1985 (`s 51`)**, you must register for `15%` GST once your total taxable turnover exceeds **`$60,000 NZD` in the last 12 months or is expected to exceed `$60,000 NZD` in the next 12 months**. If you register on the **Payments Basis** (available up to `$2 million` turnover), you only account for `15%` GST in the period the client pays your stage invoice, protecting you when a developer pays 30 days after issue.

**Do I charge 15% GST when passing on a Council Building Consent fee to my client?**
If the Building Consent application on the **Simpli portal** is in the **property owner's name** and you pay the council's deposit or final fee strictly as the owner's agent and pass it through at **exact GST-inclusive cost with zero markup**, it is an **agency disbursement** — you do not add an extra `15%` GST on top, and you attach the council's Taxable Supply Information for the owner's records. However, if you add a `10%` handling markup or re-bill a sub-consultant who invoiced your practice directly, the entire re-billed line carries `15%` GST.

**Can an architectural designer or engineer write off a CAD computer and software in one year?**
Annual or monthly software subscriptions (such as **Archicad, Revit, AutoCAD, SketchUp, and Masterspec**) are **`100%` deductible as operating expenses** in the year paid. Under **ITA 2007 s EE 38**, hardware items costing **`$1,000 NZD or less` (ex-GST)** can also be written off `100%` immediately as low-value assets. A desktop CAD workstation or laptop costing **over `$1,000 NZD` ex-GST** must be depreciated over its economic life at IRD's computer depreciation rate (**`50%` Diminishing Value or `40%` Straight Line**).

**Is Professional Indemnity (PI) insurance and LBP licence renewal 100% tax-deductible?**
Yes. Your annual **MBIE Licensed Building Practitioner (`LBP Design`)** licence fee, **ADNZ / NZIA / Engineering NZ** membership subscriptions, compulsory CPD training, and **Professional Indemnity (`PI`) and Public Liability insurance** premiums are `100%` deductible business expenses on your IR3 return (and you can claim the `15%` GST component on your GST return if registered).

**When does a self-employed NZ designer or consultant fall into IRD Provisional Tax?**
If your **Residual Income Tax (`RIT`)** at the end of the tax year exceeds **`$5,000 NZD`**, you must pay Provisional Tax in three instalments during the following tax year (`28 August`, `15 January`, and `7 May` under the standard 31 March balance date). Setting aside `25%–30%` of every paid stage invoice (plus the `15%` GST component in a separate tax sub-account) ensures you never face IRD use-of-money interest (`UOMI`).

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*Last verified November 6, 2026 against Inland Revenue (IRD) IR3/IR10 Sole Trader Guidance, Goods and Services Tax Act 1985 s 8, s 19E & s 60, and Income Tax Act 2007 s DA 1 & s EE 38.*