How can I reduce my tax obligations?

Question from Kirsin updated on 13th March 2009:

Hi, we moved to Australia last year for work. We own a home in Tauranga which is rented. We rent in Australia. What tax obligations do we have for both NZ and Australia with regards to this property? Our home has a mortgage and both are in our personal names. What can we do to reduce these obligations to both NZ and Australia tax departments?

Our expert responded:

Unfortunately, you may have missed the boat. The time to get advice would have been before you left New Zealand. As things stand now, your Tauranga property, being that it is located in NZ, is subject to NZ tax law which means that you will need to file NZ tax returns for the property.

If you do not have any NZ income, then any loss from the property will be carried forward to be offset against future year income. Any profits will have to have tax paid on them here in NZ.

As you are by now Australian tax residents, you will have to file tax returns in Australia that incude the property here in NZ. Should you sell the property while you are tax residents of Australia, it will be subject to capital gains tax. Essentially, you will end up with having to file tax returns on both sides of the Tasman.

Kenina Court is a director of Acorn Solutions Limited, an accounting firm dedicated to working with clients to help them create wealth.  She is an avid property investor, entrepreneur and seminar presenter on asset protection and wealth strategies.



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