tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, November 1st, 10:39AM

News

rss
Latest Headlines

Tax changes ripple across the Tasman

Investors beware! Tax proposals in the Australian federal Budget are likely to impact on New Zealand-based investors with properties across the ditch.

Wednesday, May 24th 2017, 2:00PM

by Miriam Bell

In a bid to make housing more affordable to Australians, the recently announced federal Budget contains a number of policy measures which could impact on New Zealand investors.

Most controversial of these is the proposal to prevent foreign and temporary tax residents from claiming the main residence capital gains tax exemption when they sell property in Australia*.

This could make for a hefty capital gains tax of almost 50% on any profit made on a sale by foreign property owners.

There is some debate about whether or not expat New Zealanders in Australia will be hit by such a capital gains tax if they sell their Australian residence.

OzKiwi chairman Timothy Gassin told media that many New Zealanders living in Australia were classed as "temporary tax residents", which meant they would be affected by the proposal.

Conversely, Foreign Minister Gerry Brownlee said most expat New Zealanders would not be classed as foreigners and would, therefore, not be subject to the tax.

However, it is possible that if you own a property in Australia but live in New Zealand that the tax could be applied to you.

Tax expert Terry Baucher said there was a lack of clarity around the proposal but that property-owning New Zealanders not living in Australia would probably be classified as foreign investors.

“My first thought on hearing of the proposal was that it could prove troublesome for New Zealanders.”

While most rental properties in Australia are subject to capital gains tax already, the proposed change could affect those who bought Australian properties to live in and then moved back to New Zealand.

Investors should find out if the proposed measure would apply to them, Baucher said.

“They should also find out if it will be retrospective in effect – ie: will it be taxing the gains since the property has been held or since the measure comes into effect.

“That is critical. Because if it is when the measure comes into effect that means  the capital gains will be locked in, but if not they could be lost.”

There are other measures in the Australian federal Budget which could impact on New Zealand investors with property in Australia.

Foreign property owners who keep their property vacant for at least six months will now face a levy of at least $5,000 per annum, while developers will be restricted in the proportion of stock they can sell to foreign investors.

There is also a proposal that property investors should no longer be able to claim travel expenses as part of their investment expenditure.

But Baucher said it is worth noting that the legislation to enact the Budget proposals has not yet been written.

In his view, the measures smacked of an act in haste, repent at leisure approach and avoided dealing with issues surrounding negative gearing which is a big problem in Australia.

“The proposals are a minefield for a lot of landlords – both in Australia and elsewhere, like New Zealand.”

* Foreign and temporary tax residents who were holding property when the Budget was announced can continue to claim the exemption until 30 June 2019.

« Migration dips but housing pressure remainsBig bold strategy »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 ▼6.39 ▼6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.17 5.79 5.69

Last updated: 30 October 2024 9:36am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com