Can I release equity in a property in NZ to buy in Australia?

Any general questions you might have in regards to loans and finance.
Alastair
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Joined: Tue Jun 18, 2019 3:18 pm

Can I release equity in a property in NZ to buy in Australia?

Postby Alastair » Tue Jun 18, 2019 3:19 pm

Hi, I’m looking to access some of the equity from our investment property here in Auckland to purchase another investment unit in South-East Queensland. Our property’s recent valuation figure came out at NZ$ 890,000 with a mortgage balance of $429,000. Can I release equity in a property in NZ to buy in Australia?

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Otto Dargan
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Re: Can I release equity in a property in NZ to buy in Australia?

Postby Otto Dargan » Tue Jun 18, 2019 3:51 pm

Hello Alastair. Welcome to the forums.

Yes, you can release equity from a property in NZ to buy in Australia as a New Zealand (NZ) citizen, however, to be clear, it will involve two separate loans.

First, you’d need to refinance your mortgage in NZ in order to release equity. This is something we cannot assist you with as our Australian Credit License (ACL) only allows us to deal with finance providers in Australia. You must seek assistance with your bank directly in New Zealand.

Once you’ve released equity from your NZ property, you can contact us and we’ll help you get approved for a New Zealand Citizen home loan.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for an NZ citizen mortgage.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Alastair
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Joined: Tue Jun 18, 2019 3:18 pm

Re: Can I release equity in a property in NZ to buy in Australia?

Postby Alastair » Tue Jun 18, 2019 5:42 pm

What is the Non-Resident Withholding Tax (NRWT)? Your website mentions it briefly but I’m still unclear about it. Do I have to pay this tax?

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Otto Dargan
Mortgage Specialist
Posts: 7528
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Can I release equity in a property in NZ to buy in Australia?

Postby Otto Dargan » Tue Jun 18, 2019 6:15 pm

Hi Alastair,

There are tax issues you need to consider when borrowing money in Australia as a non-resident New Zealand citizen. Generally, if you’re living in NZ and paying interest to someone that lives outside of NZ then you may be liable to pay an additional tax called the Non-Resident Withholding Tax (NRWT). It is payable to the New Zealand IRD at 10 per cent of the interest that’s paid on foreign debts. For example, if you had an interest rate of 4.00%, you’d effectively be paying 4.40% because of the tax.


If an NZ investor chooses a bank in Australia that is a registered bank in New Zealand like ANZ, they are exempt from NRWT or if the lender meets certain criteria so that you don’t have to pay the tax or be forced to pay the tax yourself.

This is a simplified explanation of a complex issue that you should discuss with your accountant before proceeding.

Alternatively, if you have a small deposit and don’t qualify with one of the major banks, we can choose a lender that allows you to borrow with a small deposit. We can then refinance your mortgage in 2-3 years time with a lender that meets the criteria so you can avoid paying the additional tax.

The key is to apply with the right lender.

We have almost 40 lenders on our panel from which we can choose the right one for your needs.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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