Auckland Property Accountant for expert advice so important for property investors
Many Kiwis depend on investment property for their income or their retirement fund so it is vital that your real estate investments are correctly set-up and administered by an experienced Auckland property accountant. The last thing you want in your old-age is to find that your nest-egg is paying too much tax or that you are not getting the returns you expected or need.
The first step to successful property ownership
Before you agree to buy or sign a purchase agreement it is important that you have the correct property ownership vehicles set up. If you buy a property and then decide you want to transfer it to a Family Trust, you will encounter a lot of admin and significant fees. It is not a simple transfer but an actual sale at a reasonable market price.
Therefore, make sure you seek professional advice from a property accountant before you enter into any rental property purchase.
Too many people who think they understand investment property
In New Zealand it does not take long to meet someone who “understands” the investment property market. They may have read a book, been to a seminar or even own some investment properties themselves.
But every situation is different and the regulations change frequently. Rental property tax laws are complex and even accountants with years of experience attend seminars and read specialist publications to keep on top of the changes. What chance does a well-meaning amateur expert have of knowing the latest regulations and tax changes?
So for your own security, talk to a successful specialist property tax accountant.
New investment ownership tax regime
In 2011, there was a very significant change to investment vehicle ownership in NZ. For a long time people had used the LAQC as a means to set up a company which would own the investment properties. There were then tax advantages to off-set expenses against personal income tax. This meant that people could improve the cash-flow of rentals and often make unprofitable units economic by using the tax advantage.
This was changed as people were not using the system as it was originally intended. The tax incentive was meant to work for investment in businesses not simply for investment in properties and a tax avoidance mechanism.
The new property owning method
The new investment vehicle is known as a Look Through Company or LTC. Again the rules are complex and must be followed accurately to avoid having the IRD examine your affairs. You also want to make sure you are not paying extra tax and to avoid paying tax penalties in case you do not follow the new regulations.
Amateurs are definitely not the right people to talk to about the new LTCs so protect yourself and your future by visiting a property accountant who can help you with your investment property portfolio.
What can a property tax accounting firm do?
A good accountant will be able to help you with the whole process of investment property ownership.
This should range from setting up the correct ownership entities, through financing advice and preparing your tax returns. The best tax accountancy firms can also help you with cash-flow forecasts and analysis of the best returns on your investment. Not all accountants do this so make sure to ask any prospective accountants if they offer this service.
Remember – professional investors use an Auckland property accountant
Expert rental property investment companies and individuals always use a specialist property accountant to advise and handle their tax affairs. Make sure you do the same.