JohnLH

For my 3 year Essential Skills work permit I see lots of mention that I'm only allowed to work for 1 particular employer, and that I cannot start my own company etc etc,

so my question is, what if I decided to buy house and rent out room(s) to airbnb or even regular student tenants? would that be legal or would that somehow count to "working for someone else" or "being self-employeed" etc?

escapedtonz

Correct. That type of temporary work visa is only possible because of the job offer you have so you can only remain in NZ for the period of that visa if you remain in that job for that company. If that detail was to change for whatever reason then you would have to inform Immigration who would reconsider the validity of your visa and decide of you remained eligible.

In terms of anything else, so long as you conduct your life here within the terms and conditions of your visa then you'll be fine.
There will be no condition on your visa stating you can't own property or earn money from rental. Immigration don't impose conditions other than those related to work, travel and partnerships.
So long as you are working in NZ in the job which made you eligible for the visa you have then you'll be fine.

The issue you may have with purchasing a property is the purchase itself. Unless you have the cash to fund the purchase you are going to struggle. You wouldn't get a mortgage as you are only on a 3 year visa so any finance you apply for can only be considered for the period of the visa. There may also be conditions of sale that only allow people on resident visas and above can purchase ?

JohnLH

Hmm I haven't so far questioned the idea of getting a mortgage, at least the following page says that work permit workers can get mortgage up to 80% loaned:
Getting a Mortgage in New Zealand

I have all intentions of staying at my job, I just mean if renting out would somehow be counted as sort of self-employment that wouldn't be allowed. But you say no and I also myself think it should be allowed.

MrsFychan

you would have to declare the income to IRD and I think this is something you should personally check with immigration rather than what we may think of the wording.
not saying that escapetonz is incorrect just I feel it would be best to actually check as I do not believe this has come up on here before so would be interested in the answer.

escapedtonz

I think that article is 3 years old. Since then all banks have tightened their rules regarding lending and the government all brought in new rules and processes to make it more difficult for overseas investors buying up NZ property. You may find you cannot meet the lending criteria by only having the right to live and work in NZ for 3 years ?

Of course it goes without saying that if you do purchase and rent out the property any income must be declared to IRD. I'm pretty sure Immigration wouldn't be interested or have issue with you trying to earn money as a side line from being the owner and landlord of property but I'm just not sure it's that easy when only on a temporary work visa.
The bank would want some serious guarantees that you can pay that mortgage and I don't think they consider any assets overseas anymore ?

JohnLH

Ouch I see, shame it's so very difficult to find exact info.

I'm not looking to use overseas assets for guarantees, just to move my savings to NZ + my job. However if the loan ratio is like 50% or something then I simply cannot afford it.

Justcol

you could say your partner, or a future partner is an airbnb client and then you dont have to give them anything after two years

or doesnt it work like that ?!?

MrsFychan

atm to buy a property to rent out you would need 40% deposit if you are using money from overseas there are more hurdles to jump, which I won't go into now.

any money made on the rental pay will have to be declared and tax paid on. You will have to set yourself up as a landlord as you have to join the Bond scheme and deposit bonds into a bond account. (not your own personal/business account) this safe guards the bond for the renter.

JohnLH

Any chance you could link me to info about those hurdles you mentioned? (or even describe them, would be much appreciated). Yeah it would be money from overseas but I would simply send that money to NZ first so if it's now in a NZ bank then I'm not sure what the problem is.

MrsFychan

It depends on the property, you would have to make sure it is not on sensitive land, Overseas Investment Act 2005 No 82 (as at 20 May 2014), Public Act Schedule 1 Sensitive land – New Zealand Legislation
as that would need you to go through the OIA process.

as I say not really something to worry about atm. Your difficulty maybe getting a mortgage on a temp visa.

tax obligations; Your tax obligations (Managing a rental property)


anyway I had a site chat with a broker and this is how it went:

Me - if I am on a 3 years skills visa can I still get a mortgage?
deposit money would be coming from UK bank acc transferred to NZ one,
would that be classed as overseas investment?

Brian - Hi there. If the intention is to reside in NZ permanently then you may be considered for a loan.
A deposit coming from the UK is fine. Are you paid in NZ rather than the Uk?

Me - I will be, but my visa is classed as a temp one, so that would be no problem?

Brian - The property would need to be owner occupied and they may require a fairly hefty deposit too.
If you can email me your details I can look into this for you.

Me - I am hoping to purchase it to rent out

Brian - Shouldn't be as long as it isn't due to expire in next 18mths

Me - sorry, what shouldn't be as long?

Brian - If hoping to rent it we may struggle. That would cause issues as a lot of banks have really tightened
up on investments.

Brian - If your visa isn't expiring for 18 mths a temp visa is fine. However if it's for an investment property you would be excluded in most cases.
I can double check for you though

Me - ok thanks for that, that is what I have been told. thanks for your help

Brian - You can email me at the wellington mortgage broker co anytime

Cheers.
-----------

hope that helps

JohnLH

Wow thanks, so as I somewhat suspected there MAY be some extra level of restrictions regarding being a LANDLORD on a temp visa, however I guess in my case I would just rent out a room so I would still be "owner occupied" so perhaps no prob.

MrsFychan

you will have to read the tax implications link on that one.

LittleLadySunshine

We had no trouble getting a mortgage on work to residence visas.
We bought at the end of 2015. There is a restriction on the quantity of land you can buy though as a non permanent resident but it would be an issue only if you are after a lifestyle block....
There wouldn't be an issue with you renting a room in your own home. But it would be something to check with your insurer. It's income rather than work I think as long as it's declared at the end of the tax year.

Bo-Jangles

Due to all the hoohah about overseas investors, this stuff is changing all the time and the banks are tightening up and no longer lending to those who are not living in or don't derive their income from NZ etc.

You simply can't rely on old news or stories of what has happened to others months ago, as it will vary according to individual circumstances and level of borrowing required; even some people that have had pre-approval from banks have come unstuck when it comes to sealing the deal and found that something has changed in the interim and that they no longer qualify for the level of finance initially agreed.

Provided you are physically present and earning income in NZ then it shouldn't be too much trouble to get a mortgage, as fundamentally the house is a secured loan and therefore very little risk to the lender as they get to keep the house if you default. The trickier bit might be negotiating how much and at what rate or for how long - if you have a massive deposit from previous house sale then should be no issue at all but you should get advice from the bank before making too many plans or committing to anything

MrsFychan

lets just point out what happened to some one after the earthquake in Wellington in 2013. They had the mortgage approved, they had the house all signed up and ready to move in, the sticking point was the Insurance, because of the earthquake Insurers were not taking on new clients . You can't buy a house without insurance, so they nearly at the stage of default. Luckily they managed to a policy but it was touch and go. Anything can change from one day to another.