Planning your Finances before you move
The New Zealand Property Guide talks you through the important financial considerations involved in buying property in New Zealand.
Understandably, there are a lot of financial aspects involved in a move to the other side of the world, and many of them are financial. Before you get stuck into the rest of the planning, you need to establish that you afford the move, and how much you have to spend. Once you know it’s viable, and have established a budget, then you can get on with that to-do list. Here are the major financial points to take into account:
The fact is, over the course of your buying journey, you are going to need to make a series of international transfers, and if you don’t manage them sensibly, you could lose money every time.
How will you finance your property
Although we understand it’s tempting to browse property websites, until you know how much you can spend you’re risking the chance of falling in love with a property that falls outside your budget. If you are planning on securing a mortgage to help you purchase in New Zealand, you will need to find a supplier and get a mortgage approved. Unless you are buying in New Zealand as an investment, you’ll probably want to source a mortgage provider within the country. You shouldn’t have any problem sourcing a mortgage from a New Zealand bank – but you should expect to provide proof of your right to live and work in the country. For expats, there are three categories of mortgage that it’s possible to acquire:
1 – Category 1 – This is for any expats that have achieved permanent residency, and therefore are entitled to the same rates at the banks as locals. In this instance the loan can be up to 95 percent of the value of a property.
2 – Category 2 – This is the option for those with a work permit. To secure a mortgage you’ll need to supply a deposit of at least 20 percent, although it can be up to 50 percent depending on your bank.
3 – Category 3 – This works best for those buying holiday homes but who have no right to reside. Rules for category three mortgages are similar to category two – namely, you’ll have to pay a larger deposit, plus you might have to open a bank account and deposit a specific amount.
To speak to a mortgage adviser about what works for your individual circumstances, contact the Resource Centre on 020 7898 0549.
You will need to notify the Inland Revenue as soon as you know that you are emigrating to New Zealand. This ensures they have the most up-to-date information, that your tax liabilities are correct, and might even see you receive a rebate. As each individual will have different liabilities depending circumstances and assets, we always recommend speaking to a tax expert to ensure your affairs are in order. It’s important to discuss inheritance tax and how this is likely to affect you after you’ve made the move. To be put in touch with our trusted independent financial advisor, click here today.
As each individual will have different liabilities depending circumstances and assets, we always recommend speaking to a tax expert to ensure your affairs are in order.
Avoiding hidden costs
If you currently own property, you’ll know that the costs involved in buying property go well beyond the property’s price tag. When you sit down to work out your budget, make sure that you factor in buying costs, legal fees, maintenance costs, and the sum you’d like to set aside for renovations and decoration. All of these ‘hidden costs’ are listed in the New Zealand Buying Guide, download your free copy today.
Overseas money transfers
Don’t underestimate the importance of having an effective currency strategy in place when sending money to New Zealand. To make your dream of emigrating to the other side of the world a reality you’re going to need to make a series of international transfers that, if not managed effectively, could dent your budget. The volatile nature of exchange rates, which move up and down by the minute, means exchanging your pounds for New Zealand dollars and sending them to your new home is not as straightforward as you might think. If you’re transferring a large lump sum to fund your new life or to buy a home to live in, even a small fluctuation could leave you significantly out of pocket or drive up the cost of your property.
Don’t underestimate the importance of having an effective currency strategy in place when sending money to New Zealand.
We recommend contacting currency specialist Smart Currency Exchange to find out how they can help you manage your risk exposure when making overseas money transfers. You will be assigned a dedicated trader who offer expert guidance and solutions that will protect your emigration and property budgets from the risks posed by fluctuating exchange rates. For example, they can help you to lock in an exchange rate for up to a year, preventing further fluctuations from impacting its price and allowing you to budget effectively in the months running up to your move.
Save money when buying overseas
Whether you are buying a property abroad, making regular payments, sending money overseas or back in to the UK, you want the most cost-effective, safe and easy way to transfer your money.
That's where Smart Currency Exchange can help. As one of the UK's fastest-growing currency exchange specialists, we save our clients thousands of pounds every day by minimising the risk associated with transferring money overseas..