Excellent deductibility provisions for losses or expenditure from one business to another. New Zealand has one of the highest residential property depreciation rates in the world.
Interest rates incurred on money borrowed for financing rental property is a deductible expense. There is no limit on the amount of interest deductibility that can be offset from one investment to another.
Legal fees such as arranging a mortgage and drawing up a tenancy agreement are deductible expenses. Rates and insurance on rental investment property are deductible.
The cost of repairs on rental investment property, management fees to collect the rent and maintain the property, commissions paid to an agent to find tenants and accounting fees incurred on preparing accounts are all deductible.
The political environment in New Zealand is stable with a government committed to economic growth. Investment in both business and property is encouraged with no restriction on ownership by overseas residents except in some limited instances requiring Overseas Investment Office (OIO) consent.
New Zealand’s positioning geographically and politically offers safety and stability. The uncertain global economy in these uncertain times makes ‘brick and mortar’ investments a more secure option.
Generally NZ enjoys net migration which is creating demand for housing across the country.
Facilities are available for non-residents of New Zealand to borrow against the security of New Zealand properties. The level of financing will vary depending on circumstance.
There are no exchange controls effecting remittances to and from New Zealand. A free flow of capital in and out of the country is permitted.
Foreign investors wishing to acquire commercial assets in New Zealand can generally do so without the approval of the Overseas Investment Office (OIO) up to a level of NZ$100,000,000 (some conditions may apply). Beyond that level OIO approval is required and is also required for some rural and waterfront property acquisitions. For more information click here.
Goods and Services Tax (GST) imposes a transactional tax of 15% on virtually all transactions. There are few exemptions with these being principally in the financial services mortgage and loan sector.
GST is an end user tax and is not normally payable in respect of residential property. With other types of property such as the Peninsula Bay lots the GST paid as part of the purchase price of the land can normally be reclaimed from the Inland Revenue Department if the purchaser is registered for GST. Accordingly there should be little fiscal effect on the purchase, except for potential timing differences in cash flow.
Each year New Zealand welcomes around 2.5 million international visitors who spend approximately $6 billion during their time in New Zealand. New Zealand’s strong international profile along with increasing air capacity to the region has helped drive growth.
For more information about New Zealand, visit Tourism New Zealand’s website www.newzealand.com
Disclaimer: Infinity Investment Group does not warrant the accuracy, completeness or currency of the information on this page, and is not liable for or in connection with any loss or damage arising from any inaccuracies, errors or omissions in the information provided. Investors should seek independent advice.
Infinity Investment Group | 1st Floor, Infinity Building | 78 Ardmore Street | PO Box 390 | Wanaka 9343 | New Zealand | Ph +64 3 443 0088 | Fax +64 3 443 0089
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