All Topics / Overseas Deals / Advice on New Zealand Residential Property

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of CunninCunnin
    Participant
    @cunnin
    Join Date: 2011
    Post Count: 5
    March 10, 2013 - 12:12 pm

    Hi All,

    Hoping for some advice on New Zealand Residential property with the view of cash flow. 

    NZ is looking attractive for the main key points

    1. No stamp duty, land tax or capital gains tax

    2. Good rental yields

    3. Good AUS$ conversion rate

    4. Lower entry price when compared to some cities  here in Australia

    Can anyone help with

    1. What constraints are there with regards to an Australian trust purchasing residential property?

    2. What taxes are payable and are they at 28% from changes in 2011?

    3. What lending constraints are there to purchase or can i get an Australian loan and purchase in NZ? ( I read most banks will have a LVR of 70%)

    4. Can Profits be transferred back to Australia or are their taxes or something that i am missing here?

    Thanks in advance :)

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,680
    March 10, 2013 - 12:37 pm

    Australian banks own NZ banks and you can unusually borrow through either from memory but the broker guys can confirm that.

    You pay tax in the country you reside in at whatever your marginal rate is.

    Profile photo of Nigel KibelNigel Kibel
    Participant
    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425
    March 10, 2013 - 8:44 pm

    Hi Cunnin

    Its true that New Zealanders do not pay capital gains tax however we have a tax agreement with New Zealand so when you sell a property you have to declare the income in Australia. The good thing about New Zealand is that you still get the 50% discount on capital gains and can negatively gear through the Australian tax system.

    Although the ANZ bank is also in New Zealand you cannot borrow in Australia for a property that is in New Zealand but you can can borrow the deposit from a line of credit in Australia and then get the loan in New Zealand. What is important to remember is that no bank can take security on off shore property.

    Nigel Kibel | Property Know How
    http://propertyknowhow.com.au
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    Profile photo of CunninCunnin
    Participant
    @cunnin
    Join Date: 2011
    Post Count: 5
    March 10, 2013 - 10:47 pm

    Thanks for the information Nigel and Freckle

    Is the 50% CGT only if you acquire the property in your own name?

    Also can an Australian corporate trustee purchase investment properties in NZ or does the trust need to be settled in NZ?

    Lucky last, Is the security used offshore generally 30% 

    Thanks again

    Profile photo of propertyinvestmentpropertyinvestment
    Member
    @propertyinvestment
    Join Date: 2013
    Post Count: 2
    March 24, 2013 - 5:25 pm

    Hi

    Which bank is the best? National australian bank, ANZ or commonwealth bank?

    Profile photo of Nigel KibelNigel Kibel
    Participant
    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425
    March 24, 2013 - 11:17 pm

    Hi Cummin

    I would suggest that you should seek the advice of an accountant however generally you can buy in a trust however in Australia if you buy a property in a company the full 100% capital gains tax still applies so I would assume if you buy in a company for New Zealand the Australian tax office would treat it the same way. I have not been heavily involved in New Zealand since 2006 so I would advise that you speak to an accountant before you invest.

    Nigel Kibel | Property Know How
    http://propertyknowhow.com.au
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    We have just launched a new website join our membership today

    Profile photo of DwightDwight
    Participant
    @bigvman
    Join Date: 2002
    Post Count: 42
    November 2, 2013 - 6:38 am

    Hi Cunnin,

    I can only speak from my own personal experience but:

    NO issue with trust purchasing property. At this time there is no problem with foreign ownership and cash is king.

    My loans have all be 80% LVR to date. No issue with finance as long as you can show ability to repay (Aus based income etc)

    Can't comment on tax rates – I'm working on making a profit first.

    Again, as Nigel says, it's best to talk to an accountant for individual advice. I can say that I spoke to my Aus based account and my NZ based accountant BEFORE taking any action. I would recommend this to any prospective purchaser.

    A disclaimer here is that my original plan was to set up a NZ based Trust and not repatriate profits to Australia initially. So the idea is any cashflow will flow to my NZ entity and help pay mortgage/ build deposits etc. At some stage I will have to pay the appropriate taxes.

    Cheers,

    Dwight

    Dwight

    Cashflow Positive Investor

    Profile photo of DwightDwight
    Participant
    @bigvman
    Join Date: 2002
    Post Count: 42
    May 15, 2014 - 10:20 am

    Did you take any action on your plans to invest in NZ Cunnin?

    I have handful of properties on the North Isaland that are now bedded down and have been brought up to a reasonable maintenance level. I’m now looking forward to having to deal with making a cash profit each year. Nice problem to ohave to consider.

    Cheers,

    Dwight

    Dwight

    Cashflow Positive Investor

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