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.
Transferring your dollars
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.
We constantly encounter people who don’t realise the importance of having an effective currency strategy in place for their overseas purchase. 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. You can secure the best exchange rates by enlisting the services of a currency exchange specialist. As they have access to live exchange rates, they can secure you a rate that’s typically between 1-4 percent better than the rate offered by your high street bank. They can also help to ensure fast transfers, and that you avoid shelling out for transaction costs.
We recommend you get in touch with Smart Currency Exchange early in your buying journey. As experts in helping people buy overseas, Smart Currency Exchange can help you get the most from your money on every transfer, as they understand each step involved in the overseas buying process. They can also help you to lock in a favourable exchange rate for up to a year, allowing you to set the price of your property, and to budget effectively in the months running up to your move. To find out how much you could save, get a free quote from Smart Currency Exchange today.
The New Zealand Buying Guide takes you through each stage of the property buying process, with practical recommendations from our experts who have been through the process themselves. The guide will help you to: