Climbing interest rates

In early April, there were many discussions following the interest rate market. The OCR was increased by 0.50%, which has NZ currently sitting at 1.50% (to note: this is the first time in over 2 decades, where the OCR was increased by more than 0.25% in one review).
It is without a doubt that this will impact the interest rate market, with many banks already increasing their...
Taking some time off?
It is quite a common scenario we encounter, where clients are wanting to look at setting up a foundation and buying a home as opposed to renting and are planning to have kids.
The most important consideration from a lenders’ perspective is how to make the mortgage work – particularly during the period when there is a reduced income.
Interest rate update - September
Property Owners 'Landed Gentry'?
I was recently reading an article about Susan St John and Terry Baucher’s latest call for a harder taxation regime for all residential property in New Zealand. (Yes, harder than the myriad of changes we have already had.)
These chardonnay liberals are promoting the annual taxation of equity in residential property (private homes and investment property) with an implied rate of return (called a ‘Fair Economic Return’). They are bitterly disappointed that NZ did not consider bringing in an accruals-based capital gains tax, and spend much of their time maligning property as an asset class to the government and left-leaning press. Despite the biggest changes to NZ property taxes in a hundred years, this pair of....
No Income? No Problem!
Our client has a home worth $1.5m in Auckland, and only $20k of debt with a main bank. They are a classic case of having high equity and low income.
They wanted to look at purchasing a trade property (buy, do-up, sell) and didn’t want to let the fact they weren’t working hold them back. They also didn’t want to get a job just to please the bank.
Do you miss large Revolving Credit Facilities?
Deal of the month: a restructure win
It’s very common for us to recommend to our clients that they review their financial position regularly, which helps them stay informed of market changes and how these may apply to their own personal situation.
Recently we worked with a couple who had an investment property with one bank, and their home with another. In most cases this is the best way to have things set-up, as I’m sure you’re all aware how fond we are here at KPM about the “Split-Banking” strategy for mortgages.
Making Additional Payments on your Mortgage
In the current low interest rate environment, we’re seeing a lot of clients look at repaying debt quite aggressively (paying above the minimum or making ‘additional’ payments to their mortgage on a regular basis). There can however be some downsides to this when applying for new lending, and I’d like to show you how to get around these so that you’re achieving your desired result, and also keeping the bank happy.
Surprise tax changes for residential investment property
Now that we have had time to reflect on the impact of these announcements, we thought you would appreciate our view on things going forward.
There has already been some great commentary written about the changes and we have included some links for you to review.
The main five points however:
BREAKING NEWS: Government introduces bright-line and interest deductibility changes
As part of the Government’s property policy announcements today (23 March 2021), there are two significant changes to tax rules that will impact residential property investors.
If you don't support the changes, there is a petition that you can sign (link here and at the end of this blog).
I ran a webinar discussing these changes on 25 March. You can watch the recording here.
LVR Update - now's a good time to act!
Case study: Forced from interest-only to principle and interest
ASSOCIATED PERSONS TRAPS - PART 2
Trap 3 – Tainting for Life
Friends, Jesse and Skylar, are 50% shareholders in a property development company called...
ASSOCIATED PERSONS TRAPS - PART 1
This blog is Part 1 of 2 on traps that arise when land transactions involve “associated persons”. By way of background, both the Income Tax Act and the Goods and Services Tax Act have definitions of associated persons and special rules that apply to transactions between associates.
Property dealers, developers and investors are often party to transactions with associated persons (e.g. restructuring ownership of existing property).
5 Common Mortgage Mistakes
As mortgage advisers we often see clients in situations where they have gotten themselves into debt and aren’t always managing things in the most effective ways, and this includes first-home buyers and also property investors.
The most common mortgage mistakes we see are as follows: