hi guys,
what implications do i need to know about if im an aussie investing in NZ residential?
capital gains?
entry and exit fees?
Land atxes?
Duties etc?how do they all compare to AUS
cheers.
Hi again Jamestk
Capital Gains Tax doesn’t apply in NZ but may if you repatriate gains to Oz. I Suggest you set up an NZ structure ie Trust or Company.
Entry Fees on purchases are minimal – legal and finance mainly. No stamp duty. Of course you have the usual expenses as council rates and building insurance.
Exit Fees will include real estate agents commission as well as legal. Still no stamp duty. If you have been claiming depreciation on the building and you sell it for more than the depreciated or book value you will have to pay tax on the depreciation recovered. This is often offset though from losses on other properties.
Land Taxes were abolished about 20 years ago.
Duties – nothing really unless you die, then there maybe death duties. Not really applicable yet but don’t go dying on us to find out.
Compared with Aus there are presently greater deductions to be had in NZ. Interest rates are slightly higher but depreciation on buildings are at 4% diminishing value and you can separate the chattels such as floor coverings, stove, hot water cylinder etc and depreciate at even higher rates.
Go to http://www.ird.govt.nz for everything there is to know on NZ Tax.
Cheers
Jeffthanks Jeff,
can anyone answer this question “Capital Gains Tax doesn’t apply in NZ but may if you repatriate gains to Oz” ?? Will anyone charge me CG if i bring my profits back to OZ?
Cheers.
Hi Jamestk,
I own property in an Aussie family trust in NZ. When I sell, my accountant advises that the capital gains will be taxed back here in Australia. Whether you bring the money home or not is irrelevant in this structure as you have ‘earned’ it and so the ATO sticks its hand out….
CD
CastleDreamer
Governments SUCK!!!
I wonder if your land in NZ was owned by a NZ trust of yours would the CG still need to be paid to out GOVT….its a good question can anyone answer it???
Remember, a trust or company are taxable entities in their own right.
A NZ Trust would be taxed as a NZ entity in NZ. Distributions from that trust to say, yourself as a beneficiary would be taxable according to your place of residence – in your case Australia unless you were to move to the Bahamas or something.
There would be some form of non-resident withholding tax in NZ on your distributions but this would probably be offset against your Aus tax.
Any capital gains by the NZ entity would not be taxable in NZ unless it was deemed a property trader or developer.
Hence, you could defer any CGT until you chose to wind things up and distribute the capital back to yourself as a beneficiary living in Aus, or the Bahamas. This could be light years away.
Regards
Jeff
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