APM Client E-Newsletter – April 2019

Posted by Auckland Property Management Ltd on April 11, 2019 | Body Corporate, Commercial, News, Newsletter, Property Management

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Welcome to the April 2019 edition of the APM Client E-Newsletter.

A Word From Howard – Capital Gains Tax and Investment

In December 2017 a Tax Working Group led by Sir Michael Cullen was established to provide recommendations to Government on structure, fairness and balance of the tax system. During March – April 2018, the Tax Working Group sought input and submissions from the public and a wide range of New Zealanders which they then reviewed, and in late February of this year released their recommendations.

Part of the Tax Working Group’s recommendations is the introduction of a Capital Gains Tax and this will include taxing gains on investment properties. In the current market, profits for selling a property after 5 years from purchase are generally untaxed, however if a landlord wishes to sell their property within 5 years of purchase, they may have their capital gain taxed in accordance to the bright line test.

I have been following the reporting on this topic since last year when it was proposed that the Capital Gains Tax was going to be reviewed. I often tend to agree with Andrew King, the Chief Executive of the NZ Property Investor’s Federation. In a recent NZ Herald article Andrew King discussed how landlords are already taxed along with having to pay local body rates, and that the Capital Gains Tax will have a ‘dramatic effect’ on businesses and investment decisions. There is concern from many in the property industry and even some on the Tax Working Group that the Capital Gains Tax may push people out of the market in the middle of what is already a housing crisis making obtaining a rental property harder for many people. The Tax Working Group were also clear that they think a Capital Gains Tax will put pressure on rents with many landlords having to increase them especially with the new rules around ring-fencing.

According to the Tax Working Group, gains that will be taxed for properties would not be retrospective but taxed AFTER they came into effect, for example if John had a property in 2016 valued at $600,000, then sells it in 2022 for $900.000, and the new tax rules came into effect on 1 April 2021 (and the new valuation of the house in 2021 is $800,000), then John won’t be taxed on the $200,000 gain that occurred before 2021, just the gain after. Those with property as of April 2019 may not be impacted by the Capital Gains Tax.

The Tax Working Group offer videos and reports on the Capital Gains Tax so I would recommend investors take the time to read all that is available and where possible retain ownership of the rental property they own. It’s fair to say that the Government alongside the Tax Working Group are looking at ways in which to improve the structure of the tax system in New Zealand for everyone, however I do not think a Capital Gains Tax is the best method of doing this.

Read the final tax report from the Tax Working Group here.

Kind regards

Howard Morley

Managing Director
Auckland Property Management

Residential Property Management

Should I Have ‘Landlord’ Insurance – Yes or No?

In late March I had the pleasure of attending a Property Management industry Conference (Palace and Real-iQ Conference) in Wellington. It’s two days focused on property management alongside 250 industry colleagues where we learn from each other and look at what’s coming up in our industry. These conferences are always supported by our many important service providers including software, utility providers, advertising, education, and legal advisors to name a few. While at the Conference I took the opportunity to sit down with Diane Nelson of REAL Landlord Insurance and put some questions to her about landlord insurance that you may just be asking yourself, check out our session below…..

Q. Being very experienced and highly thought of in the Property Management industry, what caused you to move into insurance?
Having been in the Property Management industry for over 15 years at the time, I had seen so many landlords suffer financial loss through not having the correct insurance policies to cover them. Many of the existing policies gave limited cover, but often did not cover tenant related losses. The company I worked for also struggled with the fact that our Property Managers were therefore being blamed for the losses even though the tenants were responsible for them. The ineffectual judicial system also exacerbated the problem with ineffectual tribunal rulings, and recovery of the losses were hard to get…

Read Celia’s full interview with Diane Nelson here.

Kind regards

Celia Burbery

General Manager – Property Management
Auckland Property Management

Healthy Homes Standards Announced

With the passing of the Healthy Homes Guarantee Act in December 2017, Housing and Urban Development Minister Phil Twyford sought submissions for heating, insulation, ventilation, moisture and drainage, and draught stopping for residential rentals in New Zealand.  According to Phil, making sure all New Zealanders had warm, dry homes was the most important public health change the Government could make. In late February this year, minimum requirements were announced.

Read more on the announced standards here.

APM Property Investment Seminar – LIMITED TICKETS LEFT

Missed our first complimentary property investment seminar? Come along to our next one! After a brief overview of the Act, we will then open the floor for Q&A with Guest Scotney Williams from The Tenancy Practice Service (TPS). Scotney is a consultant on tenancy law and property management who will give you the legal interpretation of exactly how this new Act may affect your landlord obligations, to help remove some of the confusion currently facing investors.

**Please note we will be holding a Chinese speaking event on the same topic later in May. More details to come.

Body Corporate Management

Access your complex information from anywhere

If you want to get up to date information about your building complex you can always access the Auckland Property Management Ltd web page specifically set up for your individual Body Corporate, Cross Lease, or Residents’ Association Incorporated.

Just go to www.aucklandpropertymanagement.net click on the Body Corporate tab and select Client Login from the drop down menu. Here you will need to select the Body Corporate Web Pages Login icon which will take you to a page where you enter your username and password (contact [email protected] or try their DDI 09 638 2500 for assistance).

If your complex doesn’t have a web page yet just contact your Body Corporate Manager or Residents’ Association Manager and they will arrange one for you.

Learn more about your complex web page here.

Kind regards

Steven Garland

General Manager – Body Corporate
Auckland Property Management

Commercial Property Management

What to Consider When Investing in Commercial Property

I read an article recently by Cavell Leitch on ‘Commercial Property as an Investment Option? – 5 Top Tips’ and it listed (unsurprisingly) the location as the top thing to consider when investing in commercial property. As with all property purchases, the location plays a major part in how your property will operate. You will need to have a good understanding of the area and the types of tenants the property will attract. Is the property in an up-and-coming area? Or is the area already well established with a great community feel? You will also need to consider the surrounding buildings and who leases them, as well as the zoning and accessibility of the property from a roading and traffic perspective. Plan for the future and consider what development might be in or near your property later down the track which might affect your investment.

Read more about the top things commercial property investors should consider.

Kind regards

Estela Guidote

Commercial Business Development Manager
Auckland Property Management

APM Staff News

We have had a big staff milestones here at APM in the last few months. We celebrated Dale Christian’s 30 year anniversary working at APM in late February with a wine and cheese afternoon. Dale was gifted with a signed framed momento from her esteemed work colleagues, and a beautiful greenstone ornament which represents continuity and togetherness.

 

March was the month we farewelled one of our Property Managers on Waiheke Island as Ruth Blunt decided to start her retirement. We thank Ruth for all her hard work, we are sure she will be missed by her clients. We are delighted that our existing Letting Agent Michelle Richards has stepped in to become a Property Manager and take on the management of Ruth’s portfolio.

7 Questions With….Franklyn Young

Franklyn Young, Business Development Manager/Body Corporate Manager

Q. How long have you been in Body Corporate Management?

Close to three years now.

Q. What do you love about working in Body Corporate Management?

I love the opportunity to work with a wide range of owners.

Q. What’s one question you get asked most from Body Corporate Owners?

The most often asked question is about fixing a problem that’s inside an Owner’s unit. Body Corporates only manage and look after the common areas such as foyers, grounds, lifts etc, so sometimes there can be confusion from Owners on where the Body Corporate responsibilities end.

Q. What’s something people should consider when buying into a Body Corporate/Residents’ Association?

I would highly recommend that if people are wanting to buy into a Body Corporate that they read and fully understand the operational rules that will need to be followed. Living in a Body Corporate is not the same as living in a standalone house.

Q. Where’s the next place on your travel bucket list, and why?

I would love to travel to Italy and Spain for the culture and amazing architecture.

Q. Do you have a favourite book/movie/TV Show, and if so what is it and why?

I like the TV Show Suits because it’s witty and amusing.

Q. What do you like to do in your spare time?

Go tramping /hiking

 

Learn more about Franklyn here.

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