Buying in NZ

[hrhpablo]

Am just checking out some property in NZ (Wanaka and Invercargill in the South Island in particular) and wanted to know if anyone has any tips or info on things that will impact me.

In particular I'm interested in issues people have experienced when purchasing NZ property, what taxation differences (if any) apply - stamp duty for example! - and who to use to do my tax depreciation in NZ.

General advice on everything from property pricing to traps or pitfalls welcome.

 

[Aceyducey]

pablo,

There is no stamp duty in NZ...

I suggest you do some EXTENSIVE research so you understand the market you want to buy into.

Particularly as many people have stopped buying in NZ as they feel the cycle has peaked there.

Cheers,

Aceyducey

PS: Coconut shells sound convincingly like horses.

PPS: And coconuts kill more people each year than sharks do. About 150 people are killed each year by falling coconuts. Beware this exotic and dangerous predator!

 

[capitalist]

As suggested, do some more research first.

Start by having a look at PI where they have a section devoted to NZ.

Also check out the main NZ forums:

property talk

landlords

PS: I think you'll find a lot of Aussies bought up big in Invercargill in the last 2 years and the yields aren't there anymore to justify investing in such a regional area.

PPS: cocunut juice is also identical to human blood plasma and was used during WWII as a plasma substitute.

 

[GreatPig]

There are taxation differences in NZ but also special taxation issues in Australia relating to foreign investment.

Seek advice from an Australian accountant or lawyer who has experience with foreign investment, especially if considering buying in a NZ trust or LAQC.

GP

PS: mice love coconut and will eat through the wall of a tent to get at it. I discovered this years ago when camping on Dunk Island.

 

[Tim]

Pablo,

just a comment on Invercargill - I was in NZ a week ago, and the Mayor (or similar) of the town was on the radio saying that, due to NZ and the Kyoto protocol I believe, that Comalco would be up for $20M per year for greenhouse gas emissions, and that they were intending to relocate to Australia, in order to save the $20M per year.

There was discussion about this impacting around 1000 jobs in Invercargill if this happens. I believe that Invercargill has had price volatility in the past, it could happen again if Comalco move out.

I suggest do research - my limited knowledge of NZ is that is has pretty much peaked, in fact there is clearly an over supply of units in Auckland etc so even the regional areas that were good pickings 12 months ago are providing lower yields.

Tokoroa, Wanganui and Dunedin are areas I am more familiar with - but these areas have already experienced significant growth in the past 12-24 months.

Tim

 

[Aceyducey]

Tim,

Where's your coconut PS?

PS: Pacific islanders believed that the world was a large coconut. Which was a step up from the Europeans who thought it was flat & surrounded by monsters.

 

[hrhpablo]

Thanks guys for your helpful responses and good advice. I know it's bad form from an investment point of view to mix business with personal, but my parents are thinking of retiring there and this is influencing the Wanaka consideration in particular.

I wasn't aware that there might be an Australian foreign investment issue to consider, so I'm going back to the drawing board...

...PS: Coconut oil is rich in lauric acid, which is known for being anti-viral, antibacterial and anti-fungal. Studies have been done on its effectiveness in lowering the viral load of HIV/AIDS patients. Coconut oil is also being used by thyroid sufferers to increase body metabolism, and to lose weight.

 

[ggumpshots]

Setting up a NZ trust with appropriate control is an easy way to avoid CGT on properties.
NZ trusts can be got for a few hundred dollars
Not doing so as an Aussie resident will be an expensive exercise

 

[CHISEL]

new Zulland

Here's something I found at BisShrapnel I hope any way if you cant download this try at www.bis.com.au see media releases

 

[GreatPig]

I wasn't aware that there might be an Australian foreign investment issue to consider

Mainly in relation to taxation. The ATO want to make sure they get their cut.

GP

PS: sorry there's no coconut addendum.

PPS: nope, I was wrong.

 

[GreatPig]

Setting up a NZ trust with appropriate control is an easy way to avoid CGT on properties

I don't think "appropriate control" is that easy to do at all. I would certainly recommend having an Australian lawyer examine any proposed control structure before proceeding with it, otherwise you may find yourself unwittingly still in the Australian tax net.

GP

 

[Tim]

Can't believe I forgot the Coconut P.S. ........Doh!!!


Chisel, the PDF from Bis Sharpnel you included was good - there is a write up on this in the March API.


Anyway for the record....

P.S. "Coconut is the best and the first rate brain forming food; curd and milk belonging to the second rate; vegetables, pulses and fruits to the third rate brain forming food respectively."
- Srimat Swami Shivanandha Saraswathi in "Yogic Therapy"

P.P.S I have always thought that Srimat Swami really knew his stuff when it came to cocconuts......