The following applies to Australians investing in NZ
I have seen previous some posts about NZ IPs and thought i would share some knowledge i have.
100% finance on NZ properties is possible, as long as you have some form of equity in australia. As mentioned in earlier posts, you can finance up to 80% LVR on a NZ property using it as security. You can do this with an australian broker and or bank, as long as the lender has a presence in NZ, such as the ANZ bank for example. Or otherwise you can use a Kiwi bank.
If you have a property in australia, or some other form of equity to secure a loan against, you can simply use your australian equity to get a loan in Australia for the other 20% for the NZ property.
EXTRA CARE should be taken with tax implications. How it works can get a little complicated. If people want i can post another message about that later. Basically though you will need a NZ accountant to work with your Australian accountant. As I said if any one wants to know more about that i will post another rather long message about what i know about it.
Remember though ALWAYS get competent professional advice!
[cigar]
William
Business Manager
The Mortgage ProfessionalsHi Youngun – your long post would be appreciated.
Cheers,
Aceyducey
I am also very interested – tell us more!
Cheers,
ItchyFeet
Ok here is what i have been advised about tax for aussies investing in NZ.
remember though i am neither an accountant or legal professional so get appropriate professional advice before acting.
An excellent advantage for kiwis is that there is no captial gains tax in NZ. BUT for australians we unfortutnaly will still have to pay CGT to the Australian gov even the property is in NZ. If you sell your NZ property, you will pay CGT although it will be reduced some what as depreciation is claimed in NZ. I will add to this in the following.
Basically aussies who invest in NZ will have to complete a NZ tax return. this is why you will need an accountant in NZ. Also the accountant in NZ can prepare all the information your australian accountant needs to do your aussie tax return.
It is in NZ where you will claim depreciation, your loan costs and interest. You should be paying the interest into a NZ account. It should be noted though that losses accumulate in NZ and are paper losses as there is no other income in NZ to claim against. you cant claim losses in NZ on your aussie tax return. although we are POSITIVE cashflow people here so that should mainly be a problem for negative gearers.
Now for what we have to pay to the aussie gov:
Loan costs can be claimed in australia. Interest paid in NZ can be claimed on your aussie tax return. you will also have to add any profit in NZ as income in your aussie return.Also i want to add that buying/selling property in NZ works a little differently to here in australia. I recommend you take the time to learn the differences.
I will state again that I am not a professional or expert in these matters and you should get appropriate professional advice!
that said i hope what the above says is useful and you can understand it as it is very confusing. and believe me the more u get into it the more confusing it can get. I have seen some excellent returns in NZ making the effort worth while.
good luck and have fun [cigar]
William
Business Manager
The Mortgage Professionals
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