What are the benefits of an LAQC for overseas investors?

Question from Taniya updated on 4th March 2009:

My husband and I have a home in NZ which we are renting for 2 years. We are relocating abroad during that period. We will sell the property after 2 years unless we can find suitable long-term renters. I am wondering if we should set up an LAQC or not. We are not covering our mortgage with the rent - we are putting in $500 a month + expenses into keeping the home. We have no NZ income. We both will reside in US and paying US taxes on our income. I am not fully understanding the benefits of forming an LAQC.

Our expert responded:

What a question!  Come and see us and we can help you!  Tax losses in NZ can only be offset against NZ income, so in order to use them you will obviously need to generate some NZ income.  I'm not sure that a home and income will necessarily give you the income you require unless you either forgo the depreciation you can claim or you are prepared to accept the deferral of your tax benefits.  Depending on your personal situation, there are other options available to you that will achieve what you have in mind.

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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