New Zealand is an excellent choice for investors looking for safe investments. The country has one of the safest parliamentary democracies in the world. Its voters generally prefer the two main political parties, and foreigners can invest in New Zealand without worrying about terrorism or other problems.
Property prices in New Zealand have doubled in the last 10 to 12 years, which has made it a desirable destination for investors. However, recent house price increases have placed new restrictions on the property market.
Foreigners may purchase investment properties in New Zealand without residency, but there are still specific laws that they must abide by. The main requirements are that you must provide accommodation to vulnerable groups in New Zealand and contribute to the local community.
Your investment property must be used for business purposes, and you cannot use it as a residence. Further, you must buy and occupy the property for at least six months. However, you may purchase property in New Zealand for a short-term period.
What You Can Expect
Those looking for investment properties in Cambridge NZ should know that cash yields on these properties can be very high. Some investors have enjoyed net yields of up to 5%. This is because the cash yield after expenses is higher than the cost of borrowing. The property is considered cash flow positive if the cash yield exceeds the lending cost. Interest rates in New Zealand are expected to fall between now and 2021.
Purchasing investment properties in New Zealand should be considered a long-term investments. Becoming a citizen of New Zealand is lengthy and expensive, so investing in property in New Zealand requires a lot of commitment and patience. Additionally, the cost of living is about 10% higher than in the United States.
Investing
There are many ways to invest in New Zealand real estate. Property investment can replace a job and be a great source of income and wealth. Investing in properties will also allow you to add value to them through renovations. You can sell them at a higher value than what you paid for them.
Investors looking to purchase investment properties in New Zealand should know about the new tax legislation in the country. While existing dwellings are subject to a capital gains tax of 39%, new builds are exempt from this tax. These changes are likely to lead to a more sustainable housing market. The government has put $3.8 billion into building new houses and has increased income thresholds for first home owner grants.
You may wish to own the investment property in your name if you plan to use the tax losses to offset future income. LTC is an option if you move to New Zealand within the next few years. If you are not planning to move to New Zealand in the next few years, you can still consider purchasing investment properties in your name if you plan to use rental property tax losses.
If you own just one rental property, you could incur a loss of up to $30,000 if you sell it. But if you own two or three properties, you could see a profit of up to $30,000 over ten years. The key to success is to buy suitable investment properties in the right area. However, this means you have to be smart. You don’t want to end up in a worse position than before.