Description
Many expatriates use investment properties in a variety of countries to supplement their income–it’s a smart choice, given the ease of acquiring income. While the rules might be different in every country, investing in property will always be a good choice–if you’re smart about where and how you do it.
Jason Hartman has traveled all over the world, so he knows a thing or two about international investments. While Jason hasn’t yet made the news, we bring you a few tales from those who have.
News in New Zealand
Very recently, New Zealand made the news for a New Zealand High Court decision regarding residency–a decision that should be celebrated by expats with property in New Zealand. In 2013, the Taxation Review Authority made a decision that any New Zealander who both lived and worked overseas for over ten years was a tax resident in New Zealand. Any claim otherwise was not acceptable. Fortunately, the High Court overturned that ruling this September.
The Taxation Review Authority deemed ownership of an investment property in New Zealand a sufficient tie to New Zealand for the purpose of tax residency. The residence, Mr. Diamond, lived outside of New Zealand and didn’t ever live in the investment property. The committee’s decision was made because the investment property was available to and for the investor and was in the general area where his ex wife and children resided. They ruled that he would likely choose to live in his investment property, should he move back to New Zealand–and was therefore liable for taxes.
The High Court, however, focused on how the piece of investment property was actually being used. They determined that he intended to rent it out and had, as demonstrated by his past, no plans to live there. As such, it was not considered his home and could not be listed as his New Zealand residence. The Taxation Review Authority chose to uphold penalties implemented by the Inland Revenue for not paying taxes on the basis that he was not a resident, claiming that position was incorrect.
The Inland Revenue, in a recent Interpretation Statement, recognized that investment properties and holiday homes may not be treated as a permanent residence, though those properties might be considered if other strong ties to New Zealand still exist.
The decision is good for expats who live and work overseas but make money via investment property–so long as they’ve never called their rental home.
Long term residency in the Middle East
Real estate investment has been growing in the Middle East, thanks to the rising number of expatriate centers in the area. They’re buying property at greater rates, thanks to real estate ownership being a qualifying factor for long term residency.
Property ownership guarantees a residence permit, but expats are seeing more benefits.Local economies are flourishing and property sales are higher than ever–21 percent belonging to British expats. Rental income is high (and growing) and properties appreciating in value. In 2012, property values showed an increase of 13 percent and are expected to continue their assent. So property is increasing in value–but so is rent.
Of course, these facts aren’t universally true. As Jason Hartman often points out, good rental properties are those in good, rentable locations. The same is true in the Middle East.
Singing in the ….Spain?
You just might be, if you’ve got the cash. In October of 2013, Spain passed legislation to benefit non EU citizens who wished to be in Spain. It’s a popular area for foreign investors, and the Spanish Parliament was likely wise to allow additional opportunity.
Expats can now buy a commercial or residential property to qualify for a visa that allows them to remain in Spain for twelve months (previously, a three month maximum)–but they’ve got to be willing to pay. To qualify, a property
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