Investing in NZ

Hi nmcace

Use the search function. There is a wealth of info about NZ.

Also try http://www.propertytalk.co.nz which also caters for Australian investors.

A number of PI forumites are also regular contributors to PT.

Regards

hI again,

just another thought…

what most ppl do is open a Trust account in NZ separte from their investments in Australia – that way there is no additional taxes imposed on you by Australa. The one thing about the NZ government in regards to foreign investors is that it is very very hard – in fact, I believe impossible for you to obtain a loan from Australia – like the CBA – for an investment in NZ. Either way – you can do further research into this by just calling the Taxation office – im sure they are awre of the tax considerations pertaing to NZ aswell or they can gconnect you with the Tazation office of NZ.

Best of luck.

Kind Regards.
George.

If You never never ask, you’ll never never know”

Hi Steven,

that is interesting that you mentioned that – but what happens if you do not have a property in NZ and you are looking to purchase your first property over there, can you still purchase it with 20% down and 80% from a loan within Australia?

Kind Regards,
george.

If You never never ask, you’ll never never know”

My bank said they would lend for overseas markets.
They have a section that deals with international properties which means it would be taken out of my bank managers hands and I didnt like that. I get on well direct with him.

He came up with this solution, he checked my investments and worth, offered me a line of credit that I can use as I wanted….not sure at this stage if this is the way I want to go, but it gives me the funds to draw on should I want.

Elves

Hi CD,
Going through Steve from Mobile Mortgage Market (blatant plug[biggrin]), I’ve used an Australian based lender to finance my NZ property purchases. This lender has also been used by some of my friends, who went through different brokers, for NZ properties. In my limited experience, the rates provided by this lender are significantly better than most NZ based lenders I’ve seen. NZ seems to have somewhat higher interest rates than Australia at the moment.
Matt

“NZ seems to have somewhat higher interest rates than Australia at the moment.
“

Matt B, yeah that’s right, so at the moment if you could get a LOC secured against an Aus property and go buy a NZ CF+ve property with the cash, you’d be winning.

However i did read an article on dolf de roos’s site (lots to read there, dolfderoos.com) that he recommends hedging against currency fluctuations by getting finance in the same country as the property. (apart from deposits.)

So i figure you could go for it here in the meantime while it’s working for you, fix the rates here or whatever, but if it starts to work against you , you could always refinance in NZ after the fact. that’s the great thing about LOC’s which is the flexibility.

As far as investing in NZ as a foreigner, there are restrictions only above 10 million, for beachfront or islands, on lifestyle blocks. For residential property it’s fine.

from

http://www.oic.govt.nz

Q3. When is consent required?

An overseas person requires consent to acquire or take control of 25 percent or more of:

* businesses or property in New Zealand worth more than $50 million;

* land over 5 hectares and/or worth more than $10 million;

* any land on most off-shore islands;

* land over 0.4 hectares which includes or adjoins certain sensitive areas (for example, on specified islands, reserves, historic or heritage areas, or lakes);

* land over 0.2 hectares which includes or adjoins the foreshore.

NZ does actually have CG tax if you are trading, but not if the tax dept thinks your intention was to buy and hold.

“At present neither stamp duty nor estate duty apply to residential property in New Zealand. Because of the difficulties in distinguishing the intention behind the purchase of a property – income or capital gain – effective taxation has been impracticable.
“

…” relative to other activities, residential property in NZ is lightly taxed. As a result this asset class is advantaged compared with other – and potentially more productive – activities.

……

here’s a good link about tax and property in NZ

TAXATION IMPLICATIONS OF INVESTING IN NEW ZEALAND

http://www.queenstownproperty.com/taxation_information.html

cheers-
Mini

Hi again,
I have decided to lend only 20% to my trust and borrow the rest in NZ – precisely for reasons Mini stated – hedging against currency fluctuations – I prefer the idea of having my lending in the same currency as the property owned.

Hi Matt, what sort of interest rates are you getting – I’ve got option of 6.79% in NZ lending for a property I just went unconditional on – and I can lend 5 years interest only repayments with or without LOC option then. (I want IO loans at this stage as I have a PPOR to pay off).

CastleDreamer

Matt,
lender is Westpac, but if you try the front door, they will tell you that they only lend to O/S investors who put down 50K per property – which is not much good if you intend to purchase a 40K property!!!! Its also not much good for chewing up deposits.

I am happy to give you some specifics about my NZ lender if you PM me.
Cheers
CD[computer]

CastleDreamer

Can the 20% be done with a deposit bond/Bank guarantee?