Forum Replies Created
A company can mess with your capital gains…won’t explain how here, take too long.
“xyzz ” hope you mean you have been doing it though a trust otherwise you may have some significant problems down the track.A trust is not a separate legal entity but hold assets, earns income on others behalf….hence the word trust.
If the trust makes income who will receive the distribution, if not distributed the trust is normally taxed at high marginal rates (this is the case in Aust & we tend to be in line with NZ )Your final problem is when you bring it home it might be subject to 48.50% rather than CGT at 24.5.
If you are serious you need to spend the $$$ and get advice that will help you in your OWN situation.
What you have to do is leave your income offshore and never bring it back. OR move to NZ establish a permanent place of abode for at least 6 months distribute the profit then pay NZ tax etc
Maybe find an appropriate charity…..or otherwise LIE, and hope no one opens up your income trail when you bring it back in. Problem here is the more sucessful you are the bigger the risk.A good generalist should be your first point of call. You don’t sound like its rocket science.
(and Yes i am )
It would have to be very worthwhile and very transparent. You never want to answer the question in your tax return as to whether you have a interest in a offshare trust with a YES unless you don’t mind a lot of attention you don’t really deserve.
Why not buy it with a Australian trust. Should not be an issue.
A had a client once who was in the small loan business, back in the 80’s used to charge up to 66% on small loans. ie borrow $20 repay $24, 20% interest (except it was repayable at the end of the month.) Lived of a small group of trapped uninformed, uneducated, unfortunates…..they were always invited to the Christmas party though…see..he was really a nice guy after all !!
I agree with PT Bear on all but the drop. In Sydney we have seen the market come off 10% in some ares since before the rate rise in November. Since mid November the market has slowed a lot.
I’m looking for an adjustment similar to the UK, Boston, Calif, and Houston in 1991.An intersting thing to watch, is the price of oil per barrel. It is running over US31.00 per barrel. oil prices have always been strong driver of inflation. High inflation will lift incomes and all of a sudden property affordability will correct, without the govt stuffing….sorry doing anything.
All a matter of time.
Only desparate people pay 11-17%. How desparate are you for a good return.
Ever hear of Estate Matgages….or Custom credit..?????
Did’nt think soOn remote investing (where you don’t live in the area ) you really need a GOOD agent. As an accountant we have clients in property (not a lot as we are a SME type practice ) and have heard too many bad tennant stories. Not a lot as a percentage, but when they are bad, they are REAL bad. In each case it also involves a slack agent.
Had a tennent stop paying rent, when my client flew from Darwin to Canberra to sort it out (bring back the biff!!!!) he found a stack of unanswered correspondence between tennant and agent. Rent was stopped because, of plumbing and stove not working plus other simple maintenance that needed attending. End result was tennant stayed Agent went.
In your case though you may be getting worried for nothing, give it time.
The RBA did nothing wrong.
The property market had been hot since 1999 in a Pre GST rush. When GST finished, the rush died, and the Builders did a Big winge. JH did not want anyone saying “GST sent me broke ” and so we had the first home owners grant.
It was not the low rates that created the bubble but the grant. Other markets have been hot since the Dow Jones corrected in 2000 (they started to move in 2001 ) but we had a two year start.
I can either buy a unit in the inner west of Sydney for $760,000 or buy a similar unit in Manhattan and have change to spare !!!!
Scarey huh !!
Left alone the market would have worked itself out. JH might have lost an election but…
The prediction on the stock slump is floored.
1. If they have to draw down on there 401s what will they do with it all. Go to Vegas. Don’t think so. They will need an investment to live on.
If shares start to go down, would that not be an attractive alternative to cash ??? Also in the US the Boomers do not dominate the demographic like they do here.2. Its relevance to Australia though is to our own property market (as mini stated ) The big alternative is NEW town house developments for the Over 55s, AND in our area, the NTH West of Sydney on the arceage blocks the developers have been going after everything they could get (state Govt has foreshadowed changes here… )
In Australia the boomers are almost one to one with Gen X, will Gen X be able to afford the Boomer homes ?????? If not then Boomer wealth and the economy will fees it.On Oil, if the US drives cass like the rest of us and give up their trucks (pickups are 3 of the top four vehicles in sales.) then we will all be okay.
Michael, I can’t wait, Paul should be paid for by the Government as a community service.
You forgot the other one…”hot Repossessions”…
this week we go to Kellyville where Simon and Sue are fighting to sell the home before the bank moves in….seems when they dropped their deposits on the “off the plan” units, they had a bit of a gap in their cashflow…that and the fact that Simon can’t charge for giving a plumbing quote anymore…Stephen, on the interest rate, I am going for a rise, I think the signs are that our monthly deficit needs a hand to be brought down, and the last rise did not seem to move the rate too much. The UK & (I think) NZ reserves raised rates at the same time, and with the UK property market also flagged as running hot in the UK it may happen again.
re the banks repossing, it is something that the big boys are loathe to do, because as you say the publicity is very bad. But a personal ancedate, Back in 1991 I had a client who was a personal manager for Citibank. Their banks policy was whoever wrote the loan repossed the house. She said some of her colleagus spent the majority of their day, changing the locks, putting the furniture in the street, and waiting for the former owners to come home. No urban mysth true storey, on Citibanks lower Nth shore clientele.
Now with some of the smaller lenders, with bad loans hurting their very chance of survival, I really don’t think they will care about the publicity.
Everything runs in cycles.Its human nature.
Re the comment on putting up rent on the first opportunity, I worked with a US ex pat, who rented in a large development in Pyrmont in around 1995-1996. Every six months he moved. Could always find cheaper rent in the same block. Bouhgt his own trolley and used to get some friends over on a Saturday morning to help move. Got quite good at it. In the years following the 1989-1991 boom rents in that block slowly cascaded down.
Firstly due to the media, (the Wentworth Courier..a local paper Sydney is about the size of a Metropolitan Telephone book..and lets not start on the TV shows ) a lot of people have had a vested interest in the statistics that have been thrown around..ie the immigration rate, the dept responsible said that there had been a mistake in recent years and the figures had been overstated about 200,000 over 4-5 years.
A vacancy rate of 2-3 %, don’t think so. I live in the Hills area of Sydney and travel 20 kilms to work each day. No matter which way I go I pass over 30 for lease signs. Some been there for 11 weeks. Going back a few years I could not find one.
next point will be the lend rates. A rate rise will not only make a buyer more hesitant it makers it harder to get the loan, as the repayment formula is usually income based (yes I know you can go lo docs, but with rising rates in a slowing market, why would they )
Finally, when a market rises the banks lend a very high percentage of value, but when it falls as in 1983 when units in the Gold coast halved, and 1991 the banks drop the lend rate down,
So when its overvalued you can borrow 95%, when it drops you can only borrow 70%.
Simply put there will be less buyers and those left will find it much harder.
Finally these factors start to compound, and the media start selling papers on “property is poison ” again.
Counterpoint, Howard needs this property market to hold…it was the aspirational west of Sydney who won the last election for him..so maybe we will get further tinkering with the market, and he will pass the poison chalice to Peter after the election.
Although there have been concerns about property investors overstimulating the economy, the broader problem is that among the wider population, people, because of there increased equity, are spending more than they earn.
Business is gathering pace very strongly AND rates are moving up O/S.The big question is the US, which due to the war “they had to have” is having a massive budget blowout of a proportion never seen before. Unknown territory.
So in closing they might raise them, even if they believe the property juggernaut is finally coming to a halt
They do after all have to consider everything involved.
Re the comment on the margin call, yes I understand that some loans do have the capacity to force a sale (repossess …whatever ) if the value drops a certain percentage under the loan.
Got this from a broker at an informal lunch meeting of professionals,(accountants / liquidators etc ) certainly not an expert in this area.
Would come down to reading the paperwork.
