Hi Yuyu,

I see that you have joined in this forum and posted another topic.

Your income alone isn’t going to give an adviser all the information to give you a comprehensive answer, but let’s have a go.

Let’s make an assumption that you have a deposit or equity to make the NZ property purchase, and that there will be 80% borrowing, and that you…[Read more]

Hi Misty,

I think you will find that the subdivision expenses will be classified as capital expenditure, so that the expenditure will not be claimable against revenue – unless the revenue is capital.

What I am saying is that if and when you sell the property, and there is a profit to be taxed – say capital gains for example – the subdivision…[Read more]

Hi,

You’re right on the first comment. The charity must be registered with the ATO to be claimable as a donation.

The Church of the Latter Day Saints has done very well on this score by tying in its private school funding via the tithing programme to make the tithing deductible…educational purposes.

As regards the second comment, if the…[Read more]

Hi,

It does look your accountant is giving you the runaround!

I speak from experience as a property investor in Australia and practising as a CPA in public practice in Australia for six years and, after four years experience as an accountant in New Zealand, specializing in property investment in New Zealand.

Ask your accountant a simple…[Read more]

Hi Fluffy,

I like what you are thinking! And the answer is yes.

You do have to be careful though. You can only have one PPOR at a time, and there are tests as to what is your PPOR at any given time.

Some of the tests are as follows –

1. is this your electoral address?
2. is this your address for electricity services?
3. is this your address…[Read more]

Thanks for that correction! And it’s better to be referred to as the seventh state rather than the wannabe state!

The Australian Constitution is supposed to have allowed for the inclusion of New Zealand as another State. There is CER and some recent talk of becoming one currency and one economy. I suppose we will have to watch and see nature…[Read more]

Hi,

A lawyer does more than just write up contracts to put through a property deal. They check on the property title to see if there are any mortgages that weren’t disclosed. They check for caveats and emcumbrances registered against the property. And they check for compliance with building codes and pest control. They check that the rates…[Read more]

Hi Misty,

Okay, you’ve done the easier one about the company search, and the information is not current.

I have an old copy of a CD from the National Phone Directory. You may like to check if you can obtain an up-to-date version, then do a search on the phone numbers that you have to see if you can locate current name and address…[Read more]

Hi Misty,

I hope that you will be pleasantly surprised to receive the answer YES.

A lot of part-time students do not realize that, as long as their courses relate to their day-time jobs, they can claim the cost of travel from work to tafe/uni. Even a one-way trip from home to the tafe/uni library is claimable. If they travel work-uni-work,…[Read more]

Hi,

Your questions were as follows –

1. What type of trust should I set up (its just me buying positively geared property)

A. You would set up a discretionary trust.

2. Why even set up a trust?

A. Asset protection. If you own the properties in your own name or in a company, creditors (apart from the bank from whom you borrowed money) could…[Read more]

Hi,

There are differences between NZ Trust Law and just about every other jurisdiction, so why not set up an NZ Trust to handle proposed property investments in NZ? It quarantines the properties on both sides of the Tasman, and you won’t pay CGT on your NZ properties.

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

Hi,

It’s wise to ask before doing something.

The property has not been settled yet, so it has not been rented out, I hazard a guess. The income-producing activity has not commenced, so the travel and accommodation are capital expenses. They are added to the purchase cost and can be depreciated over time.

If you visit the property after it is…[Read more]

Hi,

It is difficult to provide a comprehensive answer to an open-ended question such as yours and with very little in the way of a scenario.

I can tell you one issue is the tax issue. Once the trust changes from a NZ tax prespective from a foreign trust to a qualifying trust, IRD will want to charge the trust tax at 45% on the accumulated funds…[Read more]

Hi,

The use of the word replacement indicates repairing something by replacing like with like, so you could claim the expenses 100% in the year of expenditure. This is in revenue account.

By like with like, waht I am saying is that where you replace a wooden door with a wooden door and where you replace a metal gate with a metal gate, so that…[Read more]

Hi Fluffy,

All the available distributions do not have to be made in the year. However, the trustee will have to pay tax at 33% on the net income. When it is distributed at some time in the future, the beneficiary receives the tax credit.

No need to have a lawyer close to the area where you are buying a property. We use faxes and emails for…[Read more]

Hi Jason,

I agree with the comments of the earlier contributors. What you have done is money shuffling. The decision to sell has nothing to do with any loan attaching to a property. If you reduce a loan and sell a property, you receive back the money that you repaid. No advantage. The advantage is in the increase in value of the…[Read more]

Hi Fluffy,

Companies and Trusts are cheaper to set up in NZ than in Australia. Companies in NZ cost $250 and Trusts cost $350. Companies in Australia cost $1000 and Trusts can range from $250 to $3000.

You are right about asset protection lacking in companies, as you hold the shares and they are an asset and the company can be attacked though…[Read more]

I can confirm Terry’s advice to you. You can claim the interest incurred to buy the capital asset, and likewise you can the interest to fund necessary expenses incurred in earning the income from the asset, whether they are repairs to maintain the asset or ongoing expenses such as rates. Even funding renovations would make the interest…[Read more]