Hi,

The other contributor has suggsted correctly that you seek the advise of a property accountant. If you want some advice without the benefit of consulting an accountant, then I offer the following.

The title would be 99/1. The way to achieve it is buying the property as tenants in common. Ensure that your lawyer understands this, as they…[Read more]

Hi,

The other contributor has suggsted correctly that you seek the advise of a property accountant. If you want some advice without the benefit of consulting an accountant, then I offer the following.

The title would be 99/1. The way to achieve it is buying the property as tenants in common. Ensure that your lawyer understands this, as they…[Read more]

Hi Nick,

A nice thought, but it doesn’t happen in my experience.

You have paid for the LMI upfront and there is no refund – even where you sell the property.

I would be interested to hear of anyone receiving a refund where either the property increases in value or is sold early.

Christopher Raynal
Master Accountants Group Limited
PO Box 46018…[Read more]

Hi Nick,

Rental property inspections can be claimed for as many trips are necessary or appropriate in a given year.

If repairs are being carried out, or there are changes in tenants or property managers, more inspections than normal may be required. So more claims can be made.

It would be wise to document the trips. This would involve…[Read more]

Hi Nick,

Loan Mortgage Insurance in excess of $100 is claimable over the term of the loan or 5 years, whichever is shorter. This is pursuant to ATO ID 2002/1116.

This means that the $7 800 is claimed over five years. Where the property is sold before 5 years has expired, the balance of the unclaimed insurance is claimed at that time.

LMI is…[Read more]

Hi Nick,

In your example, the $1 500 loss would be claimed as Loss on Disposal of Assets. It would be claimed in the Statement of Financial Performance (formerly known as the Profit and Loss Statement). This shows that it is a deduction on revenue account.

In general, any loss on disposal of fixed assets is recorded as a Loss on Disposal of…[Read more]

Hi Nick,

In this case, there is no capital loss. The negatively geared property gives rise to a loss on revenue account not on capital account.

What you ask happens in effect, but not the way that you envisage. A current year deduction cannot be claimed in a future year. It has to be claimed in the relevant year to which it applies.

So that,…[Read more]

Hi,

In each of the three scenarios listed – the number of years before sale – the legal costs are claimed at the time of sale. They reduce the capital gain on which taxed is paid. They are capital costs and are taken into account to reduce the capital gain made on sale.

If by LMI you refer to loan mortgage interest, that is claimable each…[Read more]

Hi,

Maybe you should consider another tax issue – CGT. You won’t receive the 50% exemption where the property is held in a company.

Christopher Raynal
Master Accountants Group Limited
PO Box 46018 Herne Bay
Auckland New Zealand
Ph +64 9 360 3259
Fax +64 9 360 2180
http://www.masteraccountants.co.nz

Hi,

For a NZ bird dogger you can try CastleDreamer. She is a member of PropertyInvesting.com. Check out her profile.

Christopher Raynal
Master Accountants Group Limited
PO Box 46018 Herne Bay
Auckland New Zealand
Ph +64 9 360 3259
Fax +64 9 360 2180
http://www.masteraccountants.co.nz

Hi GP,

Yes, that is an interesting Income Determination from the ATO.

The use of the word “taxpayer” means that the ID can apply to any taxpayer, as companies and trusts are also referred to as taxpayers.

The ID goes on to say –

“For income years commencing on or after 1 July 2001, debt deductions are no longer subject to foreign loss…[Read more]

Hi GP,

On a closer reading of the provisions quoted, you are correct. The version I had downloaded from the internet did not clarify as well as yours the first and second limbs.

The for less than adequate consideration rule applies only to the non-discretionary foreign trusts.

The Foreign Investment Fund (FIF) rules won’t apply to trusts that…[Read more]

Hi GP,

You have still not picked up on the operative words of “for inadequate consideration”. What this means is where property, including money, is transferred to the Trust for less than its market value.

In the case of real estate property, it would be where property worth $500 000 is transferred for $400 000. Can you see what the ATO is…[Read more]

Hi GP,

It looks like we have some budding legal eagles out there! It’s great that you are doing research to be better informed.

Okay, let’s have a look at the ATO transferor trust provisions. What you are referring to is –

“Under transferor trust measures, tax is imposed on a taxpayer where they have transferred property or services to a…[Read more]

Hi Wayne,

You can set up companies online in New Zealand. I have not heard of doing it online with trusts. Trust are important legal documents, and getting it right is important for the best legal and tax outcomes.

Either you or your Australian trustee company can be the trustee of a New Zealand Trust. As long as your settlor is a New Zealand…[Read more]

Hi,

Okay, it’s a big step for anyone first time out. The properties should be positively geared, as the yields are in the region of 11-14%, so you should not have to send money across to New Zealand to top up loan repayments.

The properties are likely too old to make it worth getting a quantity surveyor to do a chattels valuation for a…[Read more]

Hi,

If you are renting out the apartment – it is an IP in other words – you can claim the levies against your tax. They are current expenditure not capital expenditure, so are claimable against the rental income each year.

If you live in the apartment, you won’t pay CGT as it is your principal place of residence.

So why wait for CGT time to…[Read more]

Hi,

According to your stated intention of buying a property for the purpose of resale – instead of as an investment as a rental property – you wouldn’t have to pay CGT.

You would pay tax on the whole of the profit made. At least with CGT you obtain a 50% exemption – you don’t pay tax on half of the net profit.

I don’t know if that is a cause…[Read more]

Hi Jamie,

If you are talking about the fees for internet payment of an investment property, yes. If you are talking about your isp fees to access the internet, the best you could do would be to apportion them between business and private.

And if you are talking about paying off your own home and not an investment property, then none of the fees…[Read more]

Hi,

I can’t help you with finding an Australian accountant to assist you, but I can help you with a New Zealand accountant – used to be CPA in public practice in Australia – who knows both sides of the Tasman.

Wait to see if anyone can recommend an Australian accountant, if you prefer to talk to someone over there.

By the way, if you’re…[Read more]