Hi,
I have recently started investing in NZ property and was wondering if anyone could recommend an accountant in Sydney who understands NZ investment property but is not too expensive.
I am having trouble finding an accountant who fits this criteria. Thanks in advance.
Kind Regards,
TimHi,
I would like to start investing in NZ property too – how did you go about finding finance from Australia, and what else do I need to know?For my first property i put down a 20% cash deposit for a NZ ANZ loan which only amounted to $15000 Australian. They offered me $500 rebate on my legals, no application fee and 7.75% 3 yr fixed (IR are higher in NZ). For subsequent properties in NZ I will use a line of credit from my homeloan (LOC is 6.67%) for the 20% deposits. I am only looking at buying property in NZ with a 9% or higher gross yield with some prospect of capital growth.
Hope this helps,
Tim.Hi Tim
i know an accountant in Queensland who is up with NZ, email me if you want the details. i don’t know if they are expensive (yet) i’m just very impressed with their knowledge.
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
I know of a great NZ based accountant, who has very reasonable rates. Just flick me an email or PM if you want his details
Cheers
RobHi, I’d appreciate some help also. I have just bought in NZ.
1) Am I better to use an existing Oz a/c for rents or open an NZ bank a/c in respect of fees etc?
2)How do you pay tax on NZ income?
3)Is there a cooling off period on contracts of sale?Hi Woodend,
The accountant that I mentioned above specialises in this type of thing, and I am sure would be able to help. If you would like his details flick me an email or PM
Cheers
RobWoodend:
Not sure about all your questions but as to regards a NZ bank a/c for rents. I highly recommend this for the following reasons:
1. You may be charged for for property managers to put your rents into an aussie a/c
2. If you are using an aussie a/c you are continually exposing yourself to the foreighn exchange rate on a monthly basis.
3. There are fees/commissions involved in completing a foreign currency exchanges especially on amounts less than $10000 AUD.
4. Foreign exchanges take a few days to take place whereas local deposits are very quick.Also what I am doing with NZ is using 20% deposits from an Australian line of credit to fund 80% loans in NZ. This mean I would only have to do a currency exchange about every 3 months to service by 20% deposits.
Hope this helps.
Kind Regards,
Tim.Hi, I’d appreciate some help also. I have just bought in NZ.
1) Am I better to use an existing Oz a/c for rents or open an NZ bank a/c in respect of fees etc?
2)How do you pay tax on NZ income?
3)Is there a cooling off period on contracts of sale?Thanks Robsta, my problem being my loan (soon to be for 2 investment properties in NZ) is financed from Australia, and has to be paid monthly of course. I realise I probably can’t avoid the exchange rate losses, however would like to know how I can reduce money transfer fees, or any other tips in this regard.
hi woodend!
>1) Am I better to use an existing Oz a/c for >rents or open an NZ bank a/c in respect of fees >etc?
I reckon open a NZ account with a hole in the wall card. Then you can get $$$ out when you need to in local currency. Or leave it there in the bank in local currency for rates, etc.
Don’t know how easy it is to open a NZ bank account from here, as I did it over there, but perhaps there is some package deal you can get with your mortgage, i.e. credit card, that would work as well>2)How do you pay tax on NZ income?
Really a question for a NZ accountant who will assess your taxable income in NZ. There will be tax profits at a non-resident rate, which I think is 30 percent. However even without a depreciation schedule there are write-offs you can do so your assessed taxable income may not be the amount you actually received in rents. Anyway after all of that, you bring that ‘income’ in on your Aus tax return as tax-paid dollars, i.e. you will not have to pay tax on it twice as NZ and Aus have a reciprocal arrangement. OK I am talking unqualified hearsay disclaimer disclaimer disclaimer etc but this is what i reckon is what you do. my Dad is my accountant and he does my tax return in this way.Then he sends that to my aus one. NZ tax year is one month sooner than Aus one, so nice and easy.
>3)Is there a cooling off period on contracts of >sale?
kinda not, but then NZ contracts are generally signed up with one or more conditions. i.e. subject to this that and the other (Lim, builder’s, tenancy, due diligence, partner’s approval, solicitor’s approval, valuation, etc etc) with a deadline to satisfy the conditions (get 2 weeks at least if you can.) So you use a condition to ‘get out’ of a property you don’t want to go ahead with for any reason not satisfied in the clauses.cheers-
Minijoy to the world
Thanks to all for the advice. Minimogul, I did not see a ‘due diligence’ clause in my contract/s. I have made purchase conditional on LIM and finance, however there was nothing specifically referring to ‘due diligence’ in the contract.
I could be wrong but just putting ‘Due Dillegence’ seems a bit vague to put in a conditional contract. Things like LIM, Building Report, Finance are part of due dillegence.
I think that if you put conditions of finance and building report that should cover most things.
Regards,
TimWhile in most cases just having subject to builders report and finance will be ok, I tend to be a little bit hesitant with just these clauses if they are not worded properly. For example if you have ‘subject to finance’ there is nothing stopping the vendor sourcing finance for you at a high interest rate and you may not have much of an out with it.
For peace of mind I always like to add something like ‘subject to approval of business partner’ or the like which means that you will always have an out in the worst case scenario.
Also with the finance clause I would be inclined to have something along the lines of ‘subject to the purchaser obtaining finance to their level of satisfaction from blah bank limited’I am no laywer or anything, this is just my 2c worth
Cheers
RobRob:
A quick one b/c I am short of time
I agree with most of what you say.
Having a property subject to building inspection wshould always give u an out of the contract if the building is 20+ years old. This is because a good building report should list all repairs, minor and major and one cannot possibly be aware of them all when you bid; hence the building report.
Sometimes I guess you just have to be creative.
Kind Regards,
TimDue diligence covers significantly more than building inspection. I wouldn’t limit myself to a building inspection unless the vendor declined the insertion of the due diligence clause my solicitor provided for my use:
“19.0 Due Diligence: This agreement is entirely conditional upon the purchaser approving in the purchaser’s sole and unfettered discretion all matters that the purchaser considers may touch, concern, or affect the property ….. “
I think that pretty much covers anything reasonable that you might wish to investigate. What if you found that the property was next door to a Drug House? With only a building inspection clause, you would be required to actually pay for a building inspection and then fall over on it, irrespective of the quality of the building – that’s not real honest, and a waste of money on a building inspection … A ‘due diligence’ clause allows you to legitimately exit the Agreement on real not pretend grounds as found…
Cheers
CDCastleDreamer
“+CF properties in NZ available now, email CastleDreamer or Minimogul”Tim,
a building inspection should always be able to give you a legitimate out if there are legitimate problems with the property irrespective of its age. I don’t understand where the reference to 20+ years comes from
Cheers
CDCastleDreamer
“+CF properties in NZ available now, email CastleDreamer or Minimogul”CD:
I agree with you about a wider due dillegence clause being needed to get out of unforseen circumstances eg. bad area.
The problem I see with this blank get out clause is that it would not (putting my vendors shoes on) instill a great deal of confidence in me about your commitment. Also if there were two offers of an equal price i would take the one with more specific get out clauses.
As to your comment about why 20 year old buildings. I only used this as an estimate (very rough) to indicate that a building report is bound to come up with something that needs repairing/renovating of a building of this age or older.
In reference to the dishonesty of using the builders report to get out of a contract when it is not the real reason I basically agree with you. However we both know that in reality contracts fall through for a variety of reasons and that purchasers use finance and building clauses to get out of contracts all the time if it is not to their advantage. I need to sate that for the record i have never had a contract fall over but am relatively new to the property game.
Regards,
Tim
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