Hi all,
I am a NZ citizen/resident who has recently purchased in Melbourne (yet to settle) and I'm in the process of determining/confirming what entity the property should be purchased in. Hence, this post….
Based on my understanding of what factors influence a structuring choice, the relevant info is:
– it is a long term buy&hold
– it will be negatively geared in the short (med?) -term
– I am single and have no dependents
– I am a PAYE employee and do not own a business
– I do not own any other propertyI have been told (by my NZ accountant) that if the property is purchased in my own name I can transfer the losses from the property over to NZ and offset them against my NZ income tax (will have to file Australian personal tax return first).
Purchasing in my own name seems good from a short/med-term cashflow perspective but then I'm concerned about asset protection as it is a long-term deal. As it is only one property – is it worth setting up other tax entities or structures for this purpose?
Also, does anyone know what is a reasonable price is to be paying for conveyancing fees?
Any advice/thoughts would be much appreciated! Thanks,
Trixy.Using a discretionary trust will give you the best possible asset protection, but you cannot offset losses against your personal income. If you are going to live in it, you may be able to get CGT exemption – but this is not available if bought in a trust.
Tax issues are complex as you are dealing with the tax laws of 2 countries so you will need a specialist to advise you on this.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I agree with Terry – a trust probably provides the best asset protection outcome for rental properties but be careful with the tax residency status of the trust – generally, if the trustee is not an Australian tax resident, the trust will be a non-resident for Australian tax purposes and that will pose Australian, as well as NZ tax issues. Also, there might be attribution issues in NZ. You will definitely need advice on this one.
Eddie
[email protected]Hi Eddie and Terryw,
It sounds like the best thing for me to do is go in and speak with a specialist given the fact that there are two sets of tax laws to deal with which makes things a little more confusing. Thanks both for your advice/thoughts, much appreciated!
Trixy
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