Arnold
CibbuanoInvesting Overseas - Thinking Out Side the Boarders
July 4th 2006 00:52
Bob Carr’s onto it and considering the tax rates that Australian property investors are subjected to, thinking outside the boarders can open up a whole new market of effective property investment options. Like any financial investment there are risks involved. These risks include those of purchasing any property and if you don’t do your homework there can be the additional danger of funneling funds into a market you don’t know much about or have little information about. On the other hand, if you take the time to do some thorough research the benefits of investing overseas can mean a far better return than those available from the current Australian market.
So what has drawn the likes of Bob Carr and John Laws to investing in New Zealand? Firstly, New Zealand is a viable market that isn’t too far away from us superior cousins. Investors like to be relatively close to their investments and if the need should ever arise popping over to New Zealand to check on the property is not going to be anywhere near as big a deal as hauling ass to Europe, Asia or America. The time zones difference aren’t ridiculous, thus communicating with your property manager is not going to be a 3am affair. It can even double as a convenient holiday home or property when time off springs around.
In terms of the financial side, the big attraction with property in New Zealand is that when it comes time to sell, any profits are most likely not going to be subject to the capital gains taxes that are applicable to Australian property. One thing to weigh up is the tax that may be applicable when or if you decide to return those profits back to Australia and ongoing taxes that the Australian Tax Department places on the ownership of foreign assets and incomes. Another nifty feature of the New Zealand tax system is the issue of depreciation tax concessions. In Australia, you can claim tax deductions on new properties based on a depreciating value. This option is also available in New Zealand. The big difference is that in Australia, you can only start claiming the deduction from the first day of construction at an annual rate of 2.5%. In New Zealand, you can claim a 4% annual deduction for any building, regardless of its age.
Now all these benefits are fine, but how is the New Zealand property market fairing? According to reports, there is an across the board sound appreciation of property values in city and country regions with strong rental demands. Provide you do the homework, find the areas of good growth and seek quality investment advice, purchasing property in New Zealand could be an adventurous and winning addition to an investment portfolio.
Tomorrow, I’ll look at some of the practicalities of investing in New Zealand property.
So what has drawn the likes of Bob Carr and John Laws to investing in New Zealand? Firstly, New Zealand is a viable market that isn’t too far away from us superior cousins. Investors like to be relatively close to their investments and if the need should ever arise popping over to New Zealand to check on the property is not going to be anywhere near as big a deal as hauling ass to Europe, Asia or America. The time zones difference aren’t ridiculous, thus communicating with your property manager is not going to be a 3am affair. It can even double as a convenient holiday home or property when time off springs around.
In terms of the financial side, the big attraction with property in New Zealand is that when it comes time to sell, any profits are most likely not going to be subject to the capital gains taxes that are applicable to Australian property. One thing to weigh up is the tax that may be applicable when or if you decide to return those profits back to Australia and ongoing taxes that the Australian Tax Department places on the ownership of foreign assets and incomes. Another nifty feature of the New Zealand tax system is the issue of depreciation tax concessions. In Australia, you can claim tax deductions on new properties based on a depreciating value. This option is also available in New Zealand. The big difference is that in Australia, you can only start claiming the deduction from the first day of construction at an annual rate of 2.5%. In New Zealand, you can claim a 4% annual deduction for any building, regardless of its age.
Now all these benefits are fine, but how is the New Zealand property market fairing? According to reports, there is an across the board sound appreciation of property values in city and country regions with strong rental demands. Provide you do the homework, find the areas of good growth and seek quality investment advice, purchasing property in New Zealand could be an adventurous and winning addition to an investment portfolio.
Tomorrow, I’ll look at some of the practicalities of investing in New Zealand property.
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