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  1. #11
    Join Date
    Oct 2013
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    1,492

    Default

    Quote Originally Posted by amandalllr View Post
    Got it, thank you. I found the thread you mentioned Anthony and the only question is why this view is held at all.

    Perhaps my CA saw I was not sold on setting up a Trust for the other reasons? Time to find a new accountant.
    As Rosco has said, most accountants don't specialise in property, it's a sideline with a few small clients. In the same way that I am capable of completing a set of dairy farm accounts, but am not going to actively solicit such clients.

    If you're with your accountant for another business or something, this is probably no reason to change - if they're a Chartered Accounting firm they probably do that bit quite well. But if you're looking at growing a property portfolio, yeah best have a look around for an alternative.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
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  2. #12
    Join Date
    May 2004
    Posts
    2,272

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    For a couple of years my accountant recommended forming a trust and gave me details of a lawyer to talk to. One located in a distant suburb. I always suspected a kickback.

    Fortunately I had done some homework about trusts, and knew what question to ask the accountant. Basically - why, in my specific circs? I never got a decent answer.

    Accountant quietly fired.

  3. #13

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    If of interest, written clarification of my CAs position states that in NZ what is relevant for deductibility of interest is the reason the money was borrowed (the asset is irrelevant)

    You have now changed the use of the family home from a family home into a rental property. This means that your rental income will be assessable income...

    Unfortunately, as the purpose for which you borrowed the funds (i.e. to purchase a family home) has not changed, the interest on the mortgage is NOT tax deductible.

  4. #14
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    13,217

    Default

    You have already had that statement of position answered, by knowledgeable PT forumites. (Who know a lot more than I do, too!)

    Whether written or not, your CA's position is wrong. (To be blunt: you are paying for incorrect / bad advice)

    Time to start looking for a new CA, methinks.
    Try Radenbrea Studios for hand-made designer jewellery. Especially if you're looking for a great gift for your lady love.
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  5. #15
    Join Date
    Jun 2004
    Posts
    9,659

    Default

    Quote Originally Posted by artemis View Post
    For a couple of years my accountant recommended forming a trust and gave me details of a lawyer to talk to. One located in a distant suburb. I always suspected a kickback.

    Fortunately I had done some homework about trusts, and knew what question to ask the accountant. Basically - why, in my specific circs? I never got a decent answer.

    Accountant quietly fired.
    Would be interesting to try your CA for the opposite senario - was a rental, now a personal home so interest is still deductible even though there is no rent income.

  6. #16
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    13,217

    Default

    You agent provocateur, you!
    Try Radenbrea Studios for hand-made designer jewellery. Especially if you're looking for a great gift for your lady love.
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  7. #17
    Join Date
    Oct 2013
    Posts
    1,492

    Default

    Quote Originally Posted by Wayne View Post
    Would be interesting to try your CA for the opposite senario - was a rental, now a personal home so interest is still deductible even though there is no rent income.
    Love this reasoning, Wayne. Such a simple way of pointing out the terrible logical hole. Though in saying that, the tax laws aren't always logical so it's not a bulletproof method.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.

  8. #18
    Join Date
    Mar 2007
    Location
    Auckland
    Posts
    2,710

    Default

    Also don't forget that you will be required to Spend Money on significant upgrades to your home before it is legal for a tenant to live in it.
    It's quite OK for you to live in an uninsulated deathtrap with no smoke alarms and minimal heating, but your tenant must not.

  9. #19
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    13,217

    Default The Markets Will Beat You, Every Time (Nigel Farage to the EC)

    Quote Originally Posted by flyernzl View Post
    Also don't forget that you will be required to spend money on significant upgrades to your home before it is legal for a tenant to live in it. It's quite OK for you to live in an uninsulated deathtrap with no smoke alarms and minimal heating, but your tenant must not.
    I find myself in two minds about this.

    First, as has been detailed lots of times, many generations of kiwis have been raised in state houses (and private rentals) that had an open fire, bare floors and no insulation of any kind. Why then are the current folks supposedly getting sicker by the generation? Too much Krummy Fried Crap and/or MacMalnutrition? Something else?

    People who operate motels, hotels and camping grounds, etc., are held to a higher standard for what they offer than an owner-occupied home, so why not residential rentals? All are businesses.

    If this sort of "the state / Labour will feather tenants' nests" syndrome gets too onerous, will the number of residential rentals decrease and those which remain go up in price? Many tenants rent because home ownership is out-of-reach or not wanted, so the idea that they will buy private rentals being sold is facile.

    Will private LLs face rent controls as a consequence of a reduced number of residential rentals increasingly getting more expensive?

    And so it might go on.
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  10. #20

    Default

    Quote Originally Posted by flyernzl View Post
    Also don't forget that you will be required to Spend Money on significant upgrades to your home before it is legal for a tenant to live in it.
    It's quite OK for you to live in an uninsulated deathtrap with no smoke alarms and minimal heating, but your tenant must not.
    Well, fortunately it is insulated and all that jazz.

    I like a WOF for rentals; of course LLs should be made to insulate when it prevents the public health bill from being added to by respiratory diseases clearly linked to damp cold squalor.. Ive lived in too many Dunedin flats...

    Not sure what Labour is promising, but the joint Greens-National warm up nz programme (as part of their MOU in the previous term) was awesome, delivered its target under budget and ahead of time and helped offset costs for landlords

    I accept that the original question has been thoroughly answered! Even though original CA still disagrees. Sigh.


 

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