Finance & Strategy Expert

Finance & Strategy
Ask Kris Pederson, director of Kris Pederson Mortgages questions relating to Mortgages, Finance, and Strategy

Kris is a respected commentator on the property and finance markets in New Zealand and overseas. He spends his time working closely with his support team sourcing clients leading edge finance strategies.

Taxing subdivided land

Vivienne asks:


We have 40 acres of bare land which we purchased in 2005. We were going to build on it but have now moved out of the district. We understand that if we sell it as one block there will be no tax implications.

However, we have decided to subdivide the block into three 10 acre and two five-acre blocks. We will provide power to the sites, fencing and gravel driveways/entries.

We are not sure if this qualifies as minor or major work when it comes to subdivisions - but we are not property developers. We have struggled to find information about the tax implications of this in New Zealand.

Can you help with some answers before we go ahead with the subdivision? If we do have to pay tax on the profit minus the cost of the land - do you know what percentage it is? Happy with any information you can provide.




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Funding trading

Peishi asks:

My wife and I have been investing in property for several years. We mainly buy and hold and have a couple of properties in Auckland. We are now interested in part time property trading to increase cash flow. What’s the best way to fund trading? Bank lender or non-bank lender? Are non-bank lender interest rates significantly higher than bank special rates? We are both working with combined income of over $200,000.



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Structure for rental

Jennifer asks:

We have our family home in a trust and are looking at purchasing a rental property. The rental would be negatively geared for some years. We still have a mortgage on our family home and we will use equity from there to finance. How is it best to structure this? Should we purchase the rental in our own names? We anticipate selling the rental once we retire. (We’re in our early 50's now).

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