Hi,
I just have a few general questions about investing in NZ. What are the costs involved, this is including everything: property manager, insurance, opening a load costs etc etc.What is the average rate a tennant stays in any one particular home. I know this is very difficult to guess, just outline your experiance.
Thats all for now. If anyone has any links to other forums like this and some guides i will greatly appreciate it. Many thanks,
Mike.Hi Mike,
– Interest rates tend to be about 1% higher than those here in Australia.
– The property managers tend to take about 10% of the rental income.
– Insurance rates are about the same.
– If you get a decent property in a demanded rental area, the tenant will be there long-term.Hope this helps.
Kind Regards,
George.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
What are the soliciter and accountant costs. If I invest in NZ, would I need to get a NZ accountant and soliciter? I am assuming so.
Again, if anyone would like to share some links i would appreciate it. Thanks again,
MikeHi Mike
I’m researching the market there too.
The answer as i understand it is “yes” you will need a local solicitor and also an accountant as you have to submit a tax return in NZ although you may be an Aus citizen.
Also, you will pay an adjusted tax amount to the ATO, and I understand capital gains tax to the ATO if you declare the income and gain.
Hope this helps
Chad [biggrin]
Hi mike and everyone
you sould be able to get a lawyer for about $1,000, i’m in the process of finding a new one as ours has just put up their costs for aussies/international investors. If you find one that hasn’t dealt across the tasman often they may quote cheaper as they aren’t aware of all the extra costs involved.
as far as loan costs you should be able to get loan application costs free.
as far as interest rates goes- as geo said rates are 1% high in NZ at the moment, but fixed rates are a better option.
property managers- as geo said 10% is common but you will find a some may be about 8.5%as far as tennancies go, i’ve never seen that info documented sorry
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
hmmmm NZ. Lots of sheep, properties seem Ok there though.
Talking about sheep, do you know which country has the most sheep in the world ?
When buying a home, what comes first? The loan or the house. Do you first find the house and then arrange finance, or do we get finance first? Wan we get a loan and just keep it in the bank with no interest repayments untill we actually take it out to buy?
Hi Msloydczka,
You can find the house first, and then apply for a loan, but I wouldn’t recommend you do this. What if you don’t get approval on your loan???
IMO I think you should approach your lending institution/broker FIRST, get verbal approval (at the very least), advice on what mortgage plan is best suits you/your circumstances (be it a home loan, or LOC) and THEN go house-hunting.
I think playing it safe is better in the long run; but hey, not everyone operates the same way, so do what you feel is right for you. If you are happy to find “the house” first, and then see about getting the finance, that’s cool too!!!
Cheers,
Jo
What is the structure most people use when investing? Also, can I get an accountant situated in Australia even though Ill be investing in NZ?
Hi Mike
as far as structures go
everyones situation is different so it is hard to make some generalizations what is best.
a lot of people buy in there own name
a lot of people buy using an Austraian Trust
a lot of people set up a NZ trustsorry i can’t be more specific,
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
How did you go about it for your portfolio Westan may i ask ? and can you recommend a good accountant in NZ?
Blitzem does that mean you pay tax twice on any surplus income earnt from your property’s,once in NZ and then again in OZ ?
CheersSo whats the difference between setting up a Australian and New Zealand Trust. Sorry for all the questions, I’m just very curious.
You don’t actually get taxed twice as you get a credit in OZ for the tax already paid in NZ.
As previously mentioned. Insurance is about the same, solicitor is around $1000, banks shouldn’t charge application fees. (I’ve been able to get the bank to make a contribution toward my legal fees). Property manager, I pay 10% in one town, 8% in another.
Structure? As westan said there are many options, if you are borrowing in NZ you may find that NZ banks are unwilling to lend to an Aussie trust if it has a corporate trustee. You’ll need a NZ solicitor and accountant.
regards,
Rod
Any reccomendations for accountants in NZ?
NZ trust vs Aussie Trust.
As mentioned above, most NZ lenders won’t lend to a foreign company (so if you have an Aussie trust with a corporate trustee it may be difficult).
You can set up a NZ trust, but the trustee must be NZ resident (otherwise it isn’t a NZ trust).
If the settlor and beneficiaries are non NZ resident then the trust will be classed as a foreign trust for NZ tax purposes (even though it’s a NZ trust). distributions to beneficiaries attract NZ withholding tax (10 or 15%), but you get a tax credit for this in OZ. If the trust retains the earnings it is taxed at 33%.I consider that a NZ trust gives greater flexibility and better asset protection as it keeps NZ investments (and borrowings) seperate from Aussie ones. There are however a few traps particularly with regards to the corporate trustee (audit requirements), so get good advice.
regards,
Rod
Hi all,
Is there a way of financing the loan in Oz and transferring the funds electronically to the vendor for NZ properties?
(Sorry to hijack your topic Mike)
Trisha
Trisha,
If the NZ property isn’t the security for the loan then you should be able just to do an international funds transfer. If the property is the security then it would be more difficult, I don’t know if Aussie lenders will accept NZ properties as security for loans.
Maybe one of the mortgage brokers here knows the answer.
regards,
Rod
Hi all
Hi Hoobo to answer your question, i should start by saying i haven’t structured my own investments as best i could, there are so many little issues and often they relate as much to the Australian tax system even more than the NZ one.
I’ve purchased most of mine using my Australian family trust. But when i started buying in NZ i was living in OZ, now i live in NZ. if i sell some properties over here i get the Capital gain exemption in NZ but not in OZ. To add to that if i now i buy using a NZ based family trust but move back to OZ the Australian tax office will then view the trust as an australian trust as the trustees are now living in OZ. So its very confussing. To add to the complication i want to do a lot of buy and fix up and sell (trading), but this will effect my capital gains exemption status so i will set up a company to do this.
Sorry all i’ve done is confussed you even more?
So it comes down to your own situation, where you live, your own family situation, your own tax situation, where will you be in the living in future, what is the purpose of buying (buy and hold long term or buy and sell). If my purpose was to buy and hold forever, then i would be happy with using my existing OZ family trust structure.regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
No worries Trisha
I think it’s a good idea for use to use this thread as a place to ask all out newbie questions.
Does anyone have any good link to sites explaining the whole trust system and how it works. It seems VERY complicated and i would like to learn more. Cheers,
Mike
You must be logged in to reply to this topic. If you don't have an account, you can register here.
