[mish&al]

Hi all,

Now for my first of my one billion and one questions..:confused:

Is there stamp duty in New Zealand on a home purchase, what are the costs involved?

In NSW the stamp duty is about 2.5% roughly (I can't remember now), costs with buying a home can be huge, especially when the median house price in Sydney is $500,000

The further you live toward the city, the higher towards $800,000 or more it is. Incredible..:wah

Can't ask the Kiwi husband for advice, he never bought a house in NZ.

Thanks in Advance

Michelle :o

[Diny]

Michelle

No stamp duty in NZ - thank God !!!!!!!

Diny

[Milliemoo]

No stamp duty in NZ :clap

Milliemoo

[Milliemoo]

SNAP! I win :p

Milliemoo

[mish&al]

Thanks Milliemoo!! Kiwiman will be very happy..:raebanana

[Super_BQ]

Beware, of the details when buying a house in NZ. There's a major difference when buying a house from a private seller vs. if the house is under a company title / business where it has to charge GST. Though stamp duty has been abolished in NZ, 12.5% GST payment on a house in NZ is a major killer - that's $62,500 in tax on a $500,000 house. Enough to call the Australian stamp duty PeAnUtS!

Though if the person in Australia had to pay GST + stamp duty there, 10% + 2.5% = 12.5% which is the same GST rate here in NZ.

BQ

[mish&al]

Thaaaaank you very much, BQ!

One thing to watch out for..

That is why forums like this are valuable to innocents like me.:yes

Michelle :)

[marcia]

Just to add to the point about GST - if you are looking at rural properties or lifestyle blocks quite often it will just be GST to pay on the land value not the house and the real estate agents do try to 'juggle' the balance to help things turn out less expensive!! (ie putting more onto the housel value and less on the land value!)

[Super_BQ]

Since we're talking about GST and real estate. I would like to add a popular 'loop-hole?' that kiwis did some 5+ years ago - blocked by IRD now.

It was common for real estate owners (those that owned more than 2 or 3 properties) to re-consolidate all their assets into 1 holding. This process was done by moving the assets ; which were held privately in their name ; into a company or trust. Why? Because 12.5% on say $1 million of real estate assets moved into a company would get $125,000 in GST credit. Yep. and with that amount, one could easily put a down deposit to build a new house. What better way to use $ than the gov't? Sounds good? In myopic terms it's fantastic but let's not stop here.

Though the person could live in a house fully funded by the gov't, don't bet that any of these properties would be sold tax free. The NZ gov't will get delayed GST back and then some as housing prices normally rise. But people tend not to associate capital gains tax with real estate in NZ. Since all the assets have moved into the company, the focus of intent also changes. The intent to speculate than to hold for say retirement reasons. So the person selling not only has to pay back the GST, but also gets smacked with a capital gains tax on the sale of the assets.

If the person were to hold the assets in personal title, well then not penny of capital gains tax would be paid (unless if you bought & sold regularly which the intend is speculative). But if the assets under the company's name, I think it's hard to convince the IRD auditor that taking advantage of this loophole was 'not a speculative' move. After all, what's the reason for running a business?

So referring to the previous post, land that requires GST would be at a significant disadvantage at selling than land that doesn't have GST applied. I mean the tax implications described, i think one could say the 12.5% is more like a CoCoNuT than a pEaNuT!

BQ

[mish&al]

Thanks again, Super BQ, good to see all info and loopholes..

I have been MIA for a few weeks, my youngest daughter started school, been working, studying, who has time to move??!!:yes