Ask Mark Withers, director of Withers Tsang & Co questions relating to Tax and Asset Structures
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.
I would like to know whether if you build a granny flat and decide to rent it out after the completion of building the expenses related to council consent, power and water line (Vector) and architectural fee are deductible? Also, could you please confirm that the building expenses (payment to builder for materials and labour) are capital expenses and, therefore, not deductible.
We are looking at selling our house and buying a rural property with two homes on it. We would live in one house and rent out the other. We are complete novices in this sort of thing. The estimated rental is around $450 a week. I understand we would have to pay tax on this, but can we claim a portion of our mortgage interest and other expenses back? We would be looking at a mortgage of around $250,000 to $350,000. Would establishing a trust be the way to go?
With the tax working group looking at capital gains tax and their final report just released I'm wondering how that will effect me. We purchased our rental back in 2003 and have approx $600,000 gain. Even if capital gains go-ahead will it only be on new properties purchased after the effective date of the new rules or will it likely still apply to ours? Also, if we keep the property and never sell - ie: it goes into our estate when we pass to hand on to our children - will it still be eligible for CGT even though there's currently not inheritance tax in NZ?