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.