Hi all,
Anyone with insights or experience re the following would be great to hear from.We are moving to Queensland in 2007 after selling our main residence. We intend to retain 2 investment properties in NZ which are doing good and give around $7k tax refund pa between them.( If we are no longer PAYE tax payers in NZ, this will be much less.)These will be managed by a property manager.
In Oz we will buy a home for ourselves (cash) and also buy investment properties ( Oz bank loans).At some stage in the future we may want to sell the rentals in NZ. I have been told that as a resident of Australia we need to pay Capital Gains tax to the Australian Goverment on the Capital gains of these NZ properties. My accountant has no information about this and suggests getting the info from an Australian Accountant. However I’d like to know the facts before moving as it may be wiser to sell these rentals before going.
Any advice and information would be welcomed.
Thanks
LindilouIt may be worthwhile contacting the A.T.O directly to get an answer as well.
I would doubt that you would have to pay cgt in Aus on a property sold in NZ, but you may need to pay tax on the money coming into Aus.
I believe that if you have already paid tax on the money coming over then you would be exempt from any tax at the Aus end. It has something to do with a reciprocal tax arrangement between the two countries.
Of course, check with the accountant as well.Cheers,
Marc.
[email protected]Hi Lindilou. FUnny thing this NZ’ers moving over here, and some of us wanting to move over to ‘Unzud’ – as I would love too…..anyway, be sure to double check, but you will find the ATO has very long arms, and I believe you will find that you will indeed pay Capital gains tax on any profit made overseas, and brought back into the country. I think there was a detailed explanation of this in Australian Property Investor Mag a few issues back. Any money you make on CF+ rent is also taxable here – and CF- offers no deductions against Aussie income, but check with ATO. Technically, CGT is not payable in NZ, but is over here. Sorry. (I’m not an accountant-just had looked into property over there… And, hey, all the best with the move. [strum]
Unfortunately if you are an Australian resident for tax purposes, you are required to pay CGT whether the property is located in Australia or overseas.
You may be entitled to foreign tax credits if tax is paid in the country where the property is located, but from memory (correct me if i’m wrong) New Zealand has no CGT so this may not be applicable to you.
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