The following information has been collated by Zamtek Trust from information provided on various New Zealand investment and government web sites:
New Zealand welcomes and encourages overseas investment and offers a tax structure which makes investment not only easy, but profitable. There are few places in the world that can offer such incentives and flexibility as well as a multitude of tax deductible expenses within tax law.
Generous Tax Incentives
- No capital gains tax: Unlike Australia or the United Kingdom, New Zealand has no capital gains tax. Wealth, profit or estate equity created through personal or business investment is not taxed.
- No land tax: The New Zealand Government does not tax property owners on the value of their land.
- No stamp duty: In 1999 the Stamp Duty abolition Act amended the Stamp and Cheque Duties Act 1971, stating that instruments executed after 20 May 1999 no longer attract conveyance duty, and do not need to be submitted to the department for stamping.
- No financial transfer taxes: Unlike Australia , the New Zealand Government does not tax the transfer of funds through the banking system.
- No wealth or death duty: Unlike many other countries, New Zealand has no indirect taxes on wealth. Inheritances upon death can be passed to beneficiaries without estate duties applying.
- Low personal tax rate: New Zealand has low personal tax rates compared with the rest of the Western world.
- Generous depreciation rates: New Zealand has one of the highest residential depreciation rates in the world. Tax deductible depreciation allowances may be carried forward indefinitely and be offset against future taxable income.
- LACQ: Loss Attributing Qualifying Companies are special tax vehicles which help to minimise risk, and allow sole traders and partnerships to own the investments in a limited liability company. LACQ’s have the ability to transfer tax losses to shareholders therefore transferring the tax benefits and incentives provided by depreciation to shareholders.
Tax Deductible Expenses
- Interest: Most notably, the interest incurred on money borrowed for financing a rental property is fully tax deductible. There is no limit on the amount of deductible interest that can be offset from one investment to another.
Legal fees relating to arranging a mortgage and establishing tenancy agreements.
- Rates and insurance:
- Mortgage repayment insurance:
- Repairs and maintenance:
- Management and body corporate fees:
Motor vehicle and travel costs:
Rates, insurance, mortgage repayment insurance, repairs and maintenance, management and body corporates fees, accounting fees, motor vehicle and travel costs relating to expenses incurred to maintain the property and all of the above which are relative to the property investment, are fully tax deductible.
Disclaimer:
The information presented herein has been collated with all due care and diligence and should not be treated as a warranty or promise as to its correctness. Prospective purchasers should make their own inquiries to satisfy themselves on all aspects.