I am interested in kick starting my Property Investment portfolio in NZ. I have a couple of short questions:
– Can I use an Australian approved loan to purchase properties in NZ? Eg. Citbank (world bank).
– What are the tax implications in NZ and Australia? eg. Income Tax in each country, etc.
– Do I have to start a company in NZ to claim GST? etc?
– What are the effects of NZ Dollar fluctuations? ie. Exchange rate.
– Most important, what are the steps involved in purchasing a property in NZ?? Or where can I find information on that?Thanks! Hope to hear from you soon.
Don’t worry about most of the questions! I manage through to sift through the info on this forum!
I have however contradicting information on getting a loan to purchase overseas property. Ie. I’m an aussie looking to take out an aussie loan to purchase a property in NZ. My morgage broker says I can using Citibank. Is this true?
you may be able to borrow through citibank however the funds must be borrowed in New Zealand
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand The United States Property Researcher and education
One Day property investment research workshop The United States. Please register your interestNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Hi Kingdavid
what Nigel has said is correct you must get the loan from a NZ bank, even ANZ will not want to assist you with properties in NZ.
where abouts in NZ are you looking to buy ? Maybe get on minimoguls database for NZ properties.
I’m not sourcing properties in NZ anymore (we basically stopped about 12 months ago). The NZ property market has some major hurdles ahead of it, I’ve written about these for months (and cope a lot of flack over it for others in the forum). I notice that this months BRW is picking up some of the issue i’ve mentioned in the past.
I sourced over 100 properties in NZ in 2004 i’m now encouraging those same people to consider selling (at a healthy profit) if they don’t want to be long term holders of NZ property. I’ve personally sold 24 (all but one) of my IP’s in NZ.You may find NZ is an attractive market to buy again in a few more years.
Regards westan
Over 100 deals done in the USA in 2005
Buy in the USA email me at [email protected]Hi KingDavid,
If you are truely keen of building a NZ portfolio I would do a couple of things.
* Consult widely – professional advice from paid experts is the best starting point.
* Get a team together – legals, accounting and finance.
* Meet the team
* talk to your OZ team about what you are doing in NZ. Use them as a sounding board. They will not directly benefit from it and can provide advice “in good faith”.
* Do some very solid Due dilligence on your target cities. Hopefully you can visit. Try to avoid tiny centres or what i call “trash properties. “
could go on and on but your question is really about finance (cause the rest of this stuff is out there in the search function).
* Get the finance first. Consult widely, find the best fit for you and get pre-approval for the whole lot in stages.
Eg stage 1: Approval for say $500,000
Then: Research – Purchase – Consolidate – Assess
During the consolidation phase attend to management – maintenance – finance etc
Assess: Have the yield/growth expections been met? How did the maintenance and repair costs meet with you expections. Have you been unrealistic? How is your team performing? What do you need to change at your end? What do you need to change at this end etc etc. What has changed since the start? What are your new expectations?
Then back to the bank for another 500k and so on.
The speed at which you are able to move forward will depend on your ability to service debt, the strength of your plan and of course YOU.
Regards,
Don
D&L Property Projects Ltd
Sourcing Quality Investments in New Zealand.Email to receive current deals & New Zealand Information Sheet.
[email protected]Hi,
We are also looking into property investing in NZ
we have found Bank of NZ very helpful although mortgage rates are significantly higher than in Oz
We are now looking at the tax implications for both countries once we invest and have all the same questions you have posted in relation to this!
We are meeting with the accountant and hopefully will be able to answer some of these questions shortly….Osty
PS Any recommendations on a site giving rental info in NZ?[rolleyesanim]
Hi Osty
if after rental info try http://www.dbh.govt.nz/housing/tenancy/
or better still contact local property managers and ask whats renting well and what isn’t. They will be a great resource for you.
also look at http://www.propertytalk.co.nz its a great site for those investing in NZ
regards westan
Over 100 deals done in the USA in 2005
Buy in the USA email me at [email protected]Oh Kingdavid
i should also suggest to you that if you want to buy a property in Invercargill then you much speak to Don (see his email above). I have no doubt that he is the leading buyers agent for Invercargill and your deals with him will be very professional. He knows the market better than any one else offering a similiar service and will get deals at the right price for you.
regards westan
Over 100 deals done in the USA in 2005
Buy in the USA email me at [email protected]wow!! fantastic advices… thank you for giving me the steps on how to start a portfolio in NZ…. I will definitely start the research… i have been first encouraged with 10% return on studio apartments in Auckland.. but it’s a matter of sorting through the finances… ie NZ loan..
with the market conditions and everyone recommending to sell… it’s not a good time for us investors.. so I’m really tossing between development of a 3 unit property with a family syndicate or to put to money into positive cash flowed IP.
Thank you again!
Hello. I have just joined the forum.
My broker says he can approve loans for non-residents no problems.
If anybody has any questions on the NZ market I would do my best to answer them. I am a Real Estate Agent in Nelson and keep pretty good track of the market here.
Feel free to ask questions on the forum or email me directly.
nelsonproperty @ slingshot.co.nz
Cheers
BrentHey all,
I have read this thread and there is no answer to some of the questions. As far as NZ tax and Aussie tax implications go … we set up an NZ based Company and trust.– All income goes into an NZ bank account and stays here to cover repayments, Maintenence and to buy more properties.
The way we set this up was so that we did not have to pay capital gains tax in Australia on the sale of the proeprty.
– Total cost was $NZ650 and it took only 3 days … and best of all we did not even have to go to NZ to do this.
If you are looking for a great bunch of guys that set this up go to http://www.masteraccountants.co.nz
This way you can make a more informed decision.BTW … we use ANZ throug ha broker who has looked after us and negotiated good interest rates and repates on legals etc … including waiving setup fees too!!!…
Best of luck.
Kiwi[baaa]Kiwi-Fulla Are you a NZ resident? Sounds like it because you said “all income stays here” or words to that effect.
If you are NZ resident then it is easy for you to have a NZ company and/or trust. A company or trust in NZ needs to have a NZ resident involved, so for Aussies, that is more difficult. I am an ex kiwi and when discussing the same for myself, I was advised that a company called Guardian Trust could be used as my NZ trust, but I haven’t investigated further .Regarding tax implications. I purchased my NZ properties in 2005 NZ tax year but there were 3 weeks of the Aust 2004 tax year remaining. I asked 2 Australian accountants and the advice was to ignore the difference in tax years, to wait until I had completed the 2005 NZ tax return and to put the “bottom line” into my 2005 Aust tax return. When it came time to do my 2005 Aust tax return I rang the ATO and they said that I must split out all income and expenses separately for each aussie tax year, which I subsequently did. It would have been easier if I had set up my record keeping initially with this in mind, but it wasn’t too big a deal, and at least the ATO will be happy.
In Australia, you will have to pay tax on all income earned regardless of where in the world it was earned. If you pay tax in NZ also (ie. if you make a profit), then that will be considered as a tax credit in your australian tax situation, so you won’t be taxed twice on the same income. But if your NZ property is in your own name and you are paying tax at non-resident rates (19.5%) then there will be tax to pay in Australia if your normal tax rate is higher than that. If you make a tax loss, then that can be carried forward indefinitely to offset against a future profit, and I don’t think you can offset that loss against your aussie income. Also your Aussie accountant has to use your NZ accountant’s depreciation schedule when doing your aussie foreign income assessment.
By the way, any travel to purchase your properties is not claimable and it can’t even be included in the cost base for your australian capital gains calculation when you sell.
I think my comments are correct, I have 3 properties in NZ but only one tax return’s experience and it is difficult to find people who are knowledgeable in both Australian and NZ situations, so I hope I don’t mislead you in any way.
[upsidedown]
In Australia, you will have to pay tax on all income earned regardless of where in the world it was earned. If you pay tax in NZ also (ie. if you make a profit), then that will be considered as a tax credit in your australian tax situation, so you won’t be taxed twice on the same income.Hi Nylorac,
That is a pretty good summary of the nuts and bolts for individuals. It is not as complicated you might think.
D&L Property Projects Ltd
Sourcing Quality Investments in New Zealand.Email to receive current deals & New Zealand Information Sheet.
[email protected]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
