Hi all,
I'm a total novice ! Please be patient....
I'm in the process of purchasing a studio apartment in Auckland (yes - I understand it's a strange market). I'm a UK resident on a visitors visa - i.e. I'm in NZ at the moment. Basically I have a few questions that you may be able to help me with. First of all I was planning to buy this small apartment outright with cash - but after a quick visit to an accountant today I've been advised to try and take out a loan (mortgage) with a New Zealand bank for at least some of the cost. I'm told that this would be good in tax terms/depreciation terms. i.e. rather than use the money I've borrowed against my mortgage in the UK the accountant said I would be better off borrowing a percentage of the mortage in NZ. To be honest I was blinded by science - I don't have much of an understanding of depreciation etc. I'm told that my NZ bank will probably lend me 20-40% of the total cost and the accountant told me I should use the money saved (some of the cash I was going to use) to reduce my mortgage in the UK. The total cost of the apartment + furniture package comes to approx $155,000. Any help with depreciation etc would be really appreciated. I'm told the mortgage rate in NZ is about 8 percent if I fix it for 5 years or so. The mortgage rate in the UK is around 5%. I guess my big question is - how am I saving money by borrowing money when I have the cash in my hands to pay for this purchase outright ? I plan to go back to the accountant for more info soon, but any thoughts on my situation would be great.
Regards,
Husky1
I'm a total novice ! Please be patient....
I'm in the process of purchasing a studio apartment in Auckland (yes - I understand it's a strange market). I'm a UK resident on a visitors visa - i.e. I'm in NZ at the moment. Basically I have a few questions that you may be able to help me with. First of all I was planning to buy this small apartment outright with cash - but after a quick visit to an accountant today I've been advised to try and take out a loan (mortgage) with a New Zealand bank for at least some of the cost. I'm told that this would be good in tax terms/depreciation terms. i.e. rather than use the money I've borrowed against my mortgage in the UK the accountant said I would be better off borrowing a percentage of the mortage in NZ. To be honest I was blinded by science - I don't have much of an understanding of depreciation etc. I'm told that my NZ bank will probably lend me 20-40% of the total cost and the accountant told me I should use the money saved (some of the cash I was going to use) to reduce my mortgage in the UK. The total cost of the apartment + furniture package comes to approx $155,000. Any help with depreciation etc would be really appreciated. I'm told the mortgage rate in NZ is about 8 percent if I fix it for 5 years or so. The mortgage rate in the UK is around 5%. I guess my big question is - how am I saving money by borrowing money when I have the cash in my hands to pay for this purchase outright ? I plan to go back to the accountant for more info soon, but any thoughts on my situation would be great.
Regards,
Husky1
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