A Focus On Property Investment
Residential property investment is one of the most popular types of investment in New Zealand. It is accessible to many people in the community who have existing equity in property. It often means that they don’t need to save a lump sum to purchase the property and banks are comfortable to lend for that type of investment, unlike many other forms of investment. There are many types of direct property investment options such as apartments, terraced housing, residential housing, lifestyle blocks, rural property, commercial & retail property.
What Are the Most Popular Types of Property Investment?
The most popular noncommercial types of property investment are residential rental properties where prospective investors purchase a property with the intention to rent the property (for a profit) and or to sell the property later for a profit (called capital gain). People will also invest in property for the sole purpose of adding value to the property by renovating it and on selling the property for a profit, while others will buy land, build and sell the new house for a profit (called speculation builds).
What Makes Buying a Property, an Investment?
It’s your ‘intention’ when buying a property that will dictate as to whether it is an investment property. If your intention is to generate a profit by renting and or selling for profit, then that property is considered an investment.
It’s important that you think carefully about your intentions when you first agree to buy a property because this will determine your tax situation and obligations.
You can learn about residential property investment tax obligations on Inland Revenue’s website.