3.36 on a Friday may be the wrong time to post this but here goes.
As an Australian tax resident I’m unable to deduct NZ property losses against Australian income for tax purposes. I’ve read however, that as a NZ tax resident you can deduct Australian property losses against NZ income.
I currently own property in Australia and may move to NZ so would be interested in your views.
Kiwa67
Hi,
Yes, New Zealand does have a more benign tax regime for foreign property investors.
However, the ATO introduced ATO ID 2002/764 with effect from 1st July 2001. This interpretive decision effectively allows for the claiming of foreign rental property losses where the interest deduction gives rise to the bulk of the foreign property loss.
It works this way. The interest deduction is separated from the other rental property expenses and is claimed in your personal tax return. With the interest claim taken out, the foreign rental property income and expenses result in a net profit, and the foreign rental property net income is reported in the appropriate section of your income tax return.
This relatively new decision means that foreign rental property losses, where interest is a large part of the rental property loss, can be claimed by Australian taxpayers. The rental properties should be in the name(s) of the taxpayers to be claimed. If the properties are owned in companies and Trusts, then the old rules of quaranting foreign rental property loseses still apply.
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.nzFrom memory, change of residence for tax purposes might also be an event triggering capital gains tax.
Thanks Christoper, thats a big help.
Does anyone know the position in relation to the point raised about change of residence being a CGT event?
Kiwa67
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