• Login:
Welcome, Register Here
follow PropertyTalk on facebook follow PropertyTalk on twitter Newsletter follow PropertyTalk on LinkedIn follow PropertyTalk on facebook
Results 1 to 5 of 5
  1. #1

    Default Selling Rental to LTC

    Have a situation. Have 2 properties. One owner occupied and one rental both on personal name. Converted the owner occupied in to a rental and sold both the properties to LTC at market price. Bought a third one for owner occupied.

    Will this be ok with IRD when we claim interest for the two rental at a higer cost.

  2. #2
    Join Date
    Oct 2013
    Posts
    1,621

    Default

    Quote Originally Posted by saleemn View Post
    Have a situation. Have 2 properties. One owner occupied and one rental both on personal name. Converted the owner occupied in to a rental and sold both the properties to LTC at market price. Bought a third one for owner occupied.

    Will this be ok with IRD when we claim interest for the two rental at a higer cost.
    Claiming the previously owner occupied home (now converted to rental) at the higher cost in the LTC is explicitly accepted by the IRD. Restructuring an existing rental into an LTC at a higher cost is less clear. It's most likely a case of looking at the whole situation and the reasons behind the transfer.

    I don't expect you'd have any trouble for this transaction, given the stated facts. But a more conservative accountant may give a different answer.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.

  3. #3
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,604

    Default

    Hi Saleemn,

    What is your commercial reason for selling the rental in your personal name to the LTC?

    If your only reason is tax, then you could have an issue.

    So spend some time, and document it carefully!

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  4. #4

    Default

    Thanks guys. These are all long terms rentals and when moved to a bigger property it was suggstd that to keep the whole thing tidy it was better to have a diffrerent structure and keep it under LTC. What other commercail reason we can attribute? Any suggestions.

  5. #5
    Join Date
    Oct 2013
    Posts
    1,621

    Default

    The 'tidiness' one is what I expected was the underlying issue. It's not that you're simply moving a rental into the LTC, you're moving your personal home into the LTC, and shifting your other rental along with it.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.


 

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Are you selling a rental?
    By elliot in forum Property Investment (NZ)
    Replies: 17
    Last Post: 31-08-2017, 04:12 PM
  2. Selling first and only rental - Advice please...
    By FrozenWaves in forum Finance, legal and tax (NZ)
    Replies: 19
    Last Post: 30-01-2015, 09:51 AM
  3. Waikato - How to get cash from your rental without selling
    By Rosco in forum Property Investor Associations (NZ)
    Replies: 1
    Last Post: 17-11-2013, 05:09 PM
  4. Deductibility of Costs in Selling a Rental
    By Perry in forum Finance, legal and tax (NZ)
    Replies: 10
    Last Post: 29-04-2013, 08:37 PM
  5. Resolutions when selling Rental property
    By jace the ace in forum Finance, legal and tax (NZ)
    Replies: 0
    Last Post: 18-09-2011, 01:40 PM
  6. Selling LAQC rental and closing down
    By EddyFranky in forum Finance, legal and tax (NZ)
    Replies: 5
    Last Post: 20-01-2010, 03:20 PM
  7. Selling my rental
    By EddyFranky in forum Property Investment (NZ)
    Replies: 1
    Last Post: 07-01-2010, 07:56 PM
  8. LAQC / Rental Trusts - selling LAQC shares to a Rental Trust ?
    By Bluekiwi in forum Finance, legal and tax (NZ)
    Replies: 10
    Last Post: 01-08-2008, 01:01 PM
  9. Selling rental
    By gannets in forum Welcome Newbies!
    Replies: 6
    Last Post: 16-10-2004, 06:47 PM
  10. Whats stopping you????
    By larrymiles in forum Property Investment (NZ)
    Replies: 7
    Last Post: 16-10-2003, 01:36 AM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •