As your Nelson and Marlborough based Chartered Accountants we’re passionate about business, but if you’re anything like us, you’ll agree there’s nothing quite like walking into your home at the end of a long working day.
Your home will no doubt be the biggest purchase you’ve ever made in your personal life. It is likely to be your sanctuary; the place you consider to be safe and secure. When you buy or build your house, you’re creating a home to make your memories in; it’s a place to watch your family blossom, and maybe the final haven that you have chosen to grow old with your life partner, yes a home is so much more than a house!
As your Chartered Accountants it’s part of our jobs to ensure that you can secure and protect a home that you have worked hard for.
FIRST TIME BUYERS:
If you’re just starting out and stepping on the ladder to your first home, there’s a recent piece of legislation that may help you on your way…
From 1 April 2015 you’ll be able to draw all your money out of your KiwiSaver account, except the Government’s kick-start payment. That includes the annual government subsidy and employer’s contributions. On top of this, you may take a holiday from making KiwiSaver contributions if you wish. Be aware there will be no employer subsidy or government contributions while your payments are stopped.
WHEN YOUR HOME IS IN A TRUST:
It’s common to allow a family to live in their home owned by a family trust, on the basis the family pays all expenses. If this agreement isn’t documented, the payments made by the family could be treated as either rent paid for the use of the house, gifts to the trust or loans to the trust. Remove the uncertainty by making sure there is proper documentation. One way of doing this is to get the trustees to record an appropriate minute in a meeting. There is often a mortgage over the house. The capital repayments on the mortgage are the responsibility of the owner, the trust. If you make those payments then, again, you’re either making a donation to the trust or it owes you the money.
The Solution – Documentation.
If you choose to make it an increase in the trust’s debt to you then you need an ongoing record to show the accumulated liability of the trust. In a nutshell, you need some accounting done. While this might not need to occur every year, it should be done regularly. We can help you with this, so please “Contact Us” if you have any questions.