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ASSOCIATED PERSONS TRAPS - PART 2

By Matthew Gilligan on November 20th, 2019.

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This month’s article is a continuation of last month’s on associated persons “traps”. Last month I highlighted two traps that can catch the unwary when moving property between associated entities. This month I have another two traps that readers should be aware of. 


Trap 3 – Tainting for Life
Friends, Jesse and Skylar, are 50% shareholders in a property development company called...

 

ASSOCIATED PERSONS TRAPS - PART 1

By Matthew Gilligan on November 8th, 2019.

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). 

 

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5 Common Mortgage Mistakes

By Ryan Smuts on October 31st, 2019.

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:
 

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Interest Rate Update - October 2019

By Kris Pedersen on October 22nd, 2019.

It has been another month of rate competition with arguably the largest attention going to Kiwisaver provider Simplicity’s entry into the mortgage industry with a market leading 2.95% rate. What was of particular interest with this was that unlike other leading rates which were fixed rates, Simplicity has an offer which is based on a floating rate. With an initial plan of $50m to be lent over the......
 
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Tax Working Group - Final Report

By Matthew Gilligan on March 26th, 2019.

The Tax Working Group’s final report has been issued, and I give a quick assessment of the main points below. However, bear in mind that what the TWG have recommended and what Labour actually implement, are likely to be completely different.

Capital Gains Tax (CGT): Unsurprisingly, the TWG has recommended that a capital gains tax be implemented. Although there was disagreement amongst the members of the group, the majority are advocating that CGT apply to.....


 
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Financing Renovations on your Properties

By Ryan Smuts on March 21st, 2019.

Financing renovations by topping up on your home loan can be the easiest and cheapest way to get the job done if you don’t have access to the cash. ‘Topping up’ means increasing your existing lending with your existing bank. In some cases, if it makes more sense economically speaking, it could even be worthwhile refinancing (moving to another bank) for a better deal on your existing mortgage AND the new funds being requested......

 

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LOSS RING-FENCING QUESTIONS

By Matthew Gilligan on February 18th, 2019.

I wrote about loss ring-fencing in my December article, and it is still a hot topic. With the rules to take effect from 1 April 2019, and the legislation still not finalised, there are a number of questions that remain. I address some of these using case studies, which could well apply to you.  

But first, in case you missed my last blog, the main points from the draft ring-fencing of losses bill are.....

 
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HOT OFF THE PRESS - RING-FENCING BILL

By Matthew Gilligan on January 31st, 2019.

On 5 December 2018, the Government released the first draft of legislation dealing with the proposed ring-fencing of tax losses from rental properties. First impression on reading the Bill is that it is extraordinarily complicated and leaves questions unanswered. Here is a quick summary of the key points........


 

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My two cents on CGT

By Matthew Gilligan on November 8th, 2018.

There is no doubt the Tax Working Group’s recently released interim report is the topic du jour. Accordingly, it is only appropriate that I offer my two cents’ worth, particularly in relation to the comments on a possible capital gains tax. 
 
  • The Tax Working Group (TWG) has ruled out a land tax or an inheritance tax, but appears to me to clearly be pushing towards implementation of CGT. They have noted that it is premature to form a view without firstly determining exactly how the tax may apply, but I would be highly surprised if their final report did not support implementation of CGT.
  • The TWG is of the view that CGT should apply across assets broadly, so not restricted solely to real estate. It would also apply to shares, intellectual property, goodwill, business assets etc. The one exception to this will be the family home.  
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New government – New expectations – New rules - Property Finance and Meth Webinar

By Kris Pedersen on June 15th, 2018.

What's happening in property finance, what meth testing levels should I be following, and what are my latest non-bank finance options?

We cover it all in this co-hosted webinar with industry experts Kris Pedersen of Kris Pedersen Mortgages and David Faulkner of RealiQ. 
 
Kris and David will discuss a range of updates in the market, including:

 
 
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Bank vs Broker

By Ryan Smuts on March 14th, 2018.

Why use a broker over your bank?


This is a question that is often asked, so it seems worth covering a few points from different perspectives which may help shine some light on the differences (or opportunities) presented by working with one or the other.


From a banking perspective:

When you’re considering applying for a loan, it makes more sense to approach a broker than it is to approach a bank because of the sheer range of options that are available to you, due to their independence. This is only one of many benefits.

When applying for a loan...

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Bright Line Extension to 5 Years

By Matthew Gilligan on February 26th, 2018.

There are imminent changes to the bright-line test which will affect you if you are planning to buy or restructure investment property. 

You are probably already familiar with the two-year bright-line test that was introduced in October 2015. Under this test, investment property that is sold within two years of settlement is subject to tax on any increase in value. 

The Labour Government has always said they will extend this test to five years. On 15 February it was announced that the new.....

 
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What are you doing with your mortgages in 2018?

By Kris Pedersen on January 31st, 2018.

I’ve noticed most people starting this year with a bit of optimism. However, it’s hard to say how much of that is based around fundamentals, and how much is more attributable to the amazing weather we have been having and a decent summer break.

From our side of the Finance Desk, it has actually been a busy start to the year with quite a few purchasers signing up new properties over the break, and general rhetoric has suggested that well-presented properties have been moving relatively quickly. Most banks have also been in contact saying that they are.....

 

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Do I need a deposit to buy an investment property?

By Ryan Smuts on January 29th, 2018.

For example, let’s say you owned a home which is now worth $1m. You have debt against this property with bank A, of $400k. You have been looking at the market, and would like to buy an investment for $500k. Based on current LVR rules for investments (35% deposit and 65% loan) you would need to come up with $175k as a deposit for this purchase. As we are aware you can top-up to 80% on your home, it means.....
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An early Xmas present from the Reserve Bank...

By Kris Pedersen on November 29th, 2017.

It’s not the relaxing to 70% that some investors had been expecting however the increase from 60% to a 65% threshold will in some cases be the difference in getting another property transaction across the line. That is the big news for investors in the Financial Stability Report which was released earlier this morning.

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