Firstly, thank you to those who have contributed to this forum over the years. The forum has become a wonderful resource for my property investing journey, and I have met some exciting people in this arena.
I'd like to know more about investing in NZ from an Australian point of view. Particularly from a structure, lending and taxation environment.
For those that have invested in NZ I'd like to hear your property investing story new or old. What structure do you use (Trust, company)? Is the lending structure the same to what I have in place and what is mentioned repeatedly by the likes of Terry W and Richard? Does the entity operate entirely in NZ and how is taxation reported (including offsetting losses or accounting for gains) on NZ investments with regards to paying tax in Australia.
Cheers,
Hi Rory,
A quote that sticks to my head when i hear NZ is ” NZ doesn’t have CGT….why? because it doesn’t go up in value”
not sure how true this is…but it was funny at the time…In regards to the finance; you wont have any problems what so ever- a lot of the lenders have sister branch in NZ and they freely lend between each country + the process and paperwork is the same.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
LOL! I like it.
That appears to be the common thread when talking to NZ investers when compared to Australian property. The NZ government has twice recently looked at introducting a number of investment taxes and CGT was one of those. Fortunately it has not been introduced however I believe it is only a matter of time.
There are some great opportunities in NZ at the moment but not for capital gain necessarily. That being said there are some excellent returns on offer at 13% or more for positive cashflow deals if you do wish to buy and hold.
Self and friends have been buying, adding value and selling with some great results.
You can have a look at one project here : http://www.theblockblog.com/new-zealand/property-investment-case-study-4/
Ian
http://theblockblog.com
Free Property Investment Information, Tools and Resoucres for Investors with a Sense of Humour – NZ – Aust – USANice returns on the project Saphire101, especially since you were not tied up in the ronevation. Cashflow is healthy in NZ at the moment favoured by low interest rates – 1-1.5% less than Aust. banks on average.
It's always nice to have a prospective buyer in mind before undertaking a project such as yours.
If you are seeking some resources or information relating to investing in New Zealand, check out my website http://www.nzpbi.co.nz This has regular updates on the NZ property market, and under the 'resources' tab are useful links to a whole range of sites relating to local regulations etc.
I also found an article in my archives relating to Australians investing in NZ property, and it has some info re taxation etc that may be helpful. I've uploaded that article onto my website http://www.nzpbi.co.nz . Cheers, Peter
Had a look at the info Peter thanks.
Belwo is a response from a chartered accountant in NZ…
"They key to the structure question (and a Trust in NZ will work well if cash flow and tax positive) is to get advice from an Australian advisor on the impact of your capital gains regime (CGT) on any property holdings you have in New Zealand.
New Zealand (currently) has no capital gains tax and only taxes the sale of properties if you acquire them for the purpose of resale for a gain (versus your intention of long term investment) or will also tax the sale if you are in fact in the business of buying and selling properties.
It is difficult to remove your exposure to CGT in New Zealand if you still wish to have the ultimate control of the investment entity, In the case of a Trust the connection can be removed by you having a New Zealand Trustee, rather than yourself, but if you hold the power to appoint (basically the ability to hire and fire) then you will still be subject to CGT in Australia on any property sales.
I recommend that you get local advice on this in the first instance.
In terms of costs, if we assume a New Zealand Trust, these normally cost $1500 to $2,000 to establish and are set up by a solicitor.
Each time a property is acquired there will be an additional fee from the solicitor, around $600 to $700, but this can vary depending on what background work is done as part of the due diligence work on the property.
The Trust would complete financial statements and file a tax return in New Zealand, the annual costs being around $2,700."
Any opinions/thoughts particularly on CGT?
Hi Rory,
I am a kiwi living in Australia on a 3 year contract and would like to purchase some IP in New Zealand while I am here. I have ascertained that a trust structure would be the best entity for me to purchase through, however the CGT issue has me concerned. Do you know if this is only applicable if I sell while living and working in Australia? If I return to NZ and live there and sell will I be liable for CPT on property acquired while living in Oz? Do you have any recommendations for accountants that have expertise in this matter?
I’d appreciate any feedback on this
Cheers
Mike
not sure how true this is…but it was funny at the time…
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