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DISCLAIMERS
Nothing on this website constitutes legal, tax, or financial advice. Prospective Investors should seek their own professional advice on the consequences of investing. No representation is made that any further information will be given, other than is required by law.
Furthermore, the information contained on this website is not comprehensive and is selective. This website does not contain all the information that a prospective Investor may require to evaluate a decision to invest and the risks associated with that investment. In making a decision to invest, prospective Investors must rely on their own examination of the information contained on this website, as well as all other information as they may consider relevant.
There does not seem to be an industry standard for calculating the ROI (Return on Investment) based on the properties income, so for the sake of clarity, we calculate our ROI's using the following formula(e)
Surprisingly not…unless the person was on a ‘risk to the US security’ list.
See our comments below under the heading 'avoiding double tax'.
The corporate structure is very important and the DTT -double-tax-treaty- (that everyone talks about) between the US and NZ will not avoid double tax if the structure is wrong. Understanding this point, we have spent many thousands of dollars organising conference calls between NZ tax specialists and US tax specialists to make sure we get the structure right for our Investors. Unfortunately, from what we have read and also the casual advice we were given, we can see many Investors actually have the wrong structure and will certainly be exposed to further tax liabilities, if investigated by IRD. Therefore, if you are buying US property independantly of us, we strongly suggest you follow the same path as we have and get a NZ tax specialist talking to a US specialist.
Casual Investors: Free of charge, we will provide the information concerning the correct structure to your CPA (or you can employ us to do it for you) We suggest a budget of $1500 - $2500 to set this up correctly
Premium Investors: The corporate structure, including all documentation and all professional fees is provided free of charge as part of any Premium Investor Portfolio
Having got the right corporate structure (as documented above), tax will be payable at source (US) on any income that is generated from your property investments in the US.
The US permits expenses, similar to NZ, to be offset against income. Some examples would be:
Providing you have bought US property and subject to certain conditions, yes.
The appointed Property Management Company collects the rents on a monthly basis and will pay all the money collected to your U.S bank account, less their fees and any maintenance expenses.
Having got the right corporate structure (as described above), your US Company (LLC) will be required to file tax returns to pay State and Federal tax (although some states are tax free). If required, we can introduce investors to professional CPA's, based in the US, who can complete all the required book-keeping and file the required tax returns for your LLC.
Once a property has been purchased, the Investor will require a US bank account, to receive rents into, and an EIN (Employer Identification Number). The Property Managment Companies will keep your rent in trust until they receive a valid US bank account accompanied by an EIN.
Casual Investors: receive assistance with establishing a bank account and creating an EIN
Premium Investors: we do it all, by providing a Bank account and EIN, for each Investor, at the time we deliver their property Portfolio.
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