I'm a Kiwi living in Australia, how do I file my property tax returns?

Michael Barker asks:
(updated on Friday, October 17th 2008)

I'm a Kiwi from Dunedin living in Sydney. I own an Investment property in Dunedin (with a mortgage) and I'm finding it very hard to get any info on paying tax on it or claiming in Australia. Also the Capital Gains Tax (legal robbery) if I was to sell. Everybody including tax advisers and accountants either shy away or give me different answers. One main question is due to the different financial year dates between countries, how do I put my tax return in Australia showing NZ if the (tax) year hasn't been done in NZ? Thanks for your time, Great website!

Our Experts Answer:

I'm sorry to hear of your dilemma.  The bad news is that you need to file tax returns in both NZ and Australia - NZ because the rental income is derived in NZ and Australia because you are a tax resident in Australia (I'm assuming).  While you are a tax resident in Australia, the tax laws of Australia will apply, including capital gains tax if you sell the property while you are living in Australia.  The good news is that in filing your Australian tax returns, you are able to carry forward your loss and offset it against any future capital gains tax that you have to pay.  The fact that NZ and Australia have different  financial year end dates just means that your tax returns will cover two different periods which means extra work on your part to provide the information to your NZ and Australian accountants.

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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