Advice sought - lifestyle change

Hi All,
Thank you in advance for taking the time to read this.
I am considering a life change move with my family. I am 42, with 3 primary age kids, and we live in Auckland NZ.
Many may know that Auckland went through a massive property boom in the last 7 years, and our paper equity has grown to about $750k(NZ) - but potentially dropping in a flat market currently.
I also have a small business that I will look to sell.
Apart from the business I have no other investments.
Our plan is to move to Brisbane and with any home equity that we make, refrain from the temptation to purchase our family home (for the time being), and purchase a couple or more investment properties.
My hope is that this could be structured in a smart way so as to gain some positive cashflow from these investments to contribute to rental expenses and possibly school fees. WE can both work, as professionals, but we do want to have more flexibility in our lifestyle, so we can support the kids in sports, and take trips etc. (I know right!)
One idea I had was to look at purchasing 3 homes in QLD (perhaps Sunshine Coast or similar) with enough deposit so as to ensure a positive cashflow, to enable the contribution to rent and perhaps school expenses etc. With the idea that in 10-15 years all would be paid off - including a family home if possible. Any money from the business could be invested or put towards a more permanent home, but it would not be much more than $400K I imagine.
I would sincerely appreciate any advice you may have on the viability of this as an option, or any others you may have instead. I am concerned about global markets, that a crash is coming soon, so not too keen on that option, but open to ideas of course.
Staying in NZ, is not really an option long term, property is way overpriced, and we would feel better joining family in Aus.

thanks again for any help.

Cheers
Zimmernz

 

I don't think the CF that you'll get from your properties in Brisbane will be able to contribute in any significant way towards your lifestyle/bills etc.

 

Thanks - I agree the market appears to be slower. For the IP's I was more looking towards the Sunshine Coast but have not looked at enough data around yield expectations yet?

 

I am not familiar with the Sunshine Coast but generally yields aren't fantastic for residential real estate to be able to make an immediate significant difference to lifestyle.

 

Will you be able to get finance? Most lenders need proof of employment income sufficient to make mortgage payments.
Marg

 

I would personally buy a house (not too expensive) outright somewhere in Brisbane. Once a job is secured, I would look into securing a couple of investment properties and keep cash in the offset.

Alternatively, dividend stocks could be a good option. Especially with tax savings and franking credits. Thought the government could close that loophole soon.

 

If you do this you will
a) have no CGT free asset
b) pay tax on any rental income (over expenses)
c) pay higher interest rates
d) more land tax eventually
e) be subject to renting - rents increasing, needing to move, unable to modify house etc.

but if you bought a main residence you could
a) pay the loan down as quick as possible
b) debt recycle into investments
c) get lower main residence loan rates, including amounts debt recycled
d) get a CGT free asset, that is
e) not subject to land tax
f) improve serviceability in the long term

 

Keep the money invested in NZ .
Perhaps a commercial property yielding 10pc .
That will give you over $75k pa (I do not know what your business will sell for )
Stay as a temporary tax resident in Australia so no tax on workwide income

 

I'd buy 3 or so in Hawkes Bay before you leave if you're set on rentals for cashflow. The savings you'd make by not paying stamp duty and land tax would set you up in a rental in Sunshine Coast while you try it out.

 

So, in NZ there is:

1) No land tax
2) No stamp duty
3) Top marginal tax rate of 33%.

I didn’t realise it was so good.

 

There is a move to being in CGT though.

 

Cant be that great. All the NZ ppl i know who migrated here say it's a beautiful country to travel but for employment prospects? Nah.

 

Ah, so no CGT as well (at least for now). Even better. Although as OZ resident, I am assuming you would pay OZ CGT (unless you are a temporary tax resident in Australia as noted by @Beano .

Do Australian banks (thinking ANZ!) lend to Australian residents buying property in NZ??

 

You still pay CGT on world wide income as an Aus tax resident. Wages are crap for most of the people living there.

No Aus banks won't do a mortgage lend for an asset overseas as far as I'm aware.

 

An ANZ rep advised me a while ago that they might allow me to borrow against my property in Australia and I could use those funds to purchase in NZ - but they wouldn’t use the NZ property as security.

I never followed it up.

 

if that comes through I expect the top rate of tax to fall to 24pc as the government already has a surplus!
And as a buy and hold investor ...that will be a big plus $$$$

 

Why bother with employment ...who cares about a job when we make so much income from our properties

 

Well for people who want to build a portfolio from scratch in NZ, I don't know of any bank that will lend to the unemployed.

 

Thanks for the replies - certainly food for thought. I feel a CGT is inbound sooner than most of us in NZ realise... Employment is limited comparatively, for sure. But good call regarding loans availability across zones - I was hoping that ANZ could do a equity transfer type of arrangement, but I have not had concrete confirmation on that.

 

The only issue I have with purchasing the family home first, is that equity is tied up again, and I would prefer to make it work in such a way that I didn't need to support it with significant additional input. Given that rental return is more important at this stage, and there has been the suggestion on a commercial property investment - is it risky to use the entire equity (house + business) into a single commercial property, or safer to diversify a bit?