Settlement Day

In the run up to settlement day, we had to:

• See the neighbour at the back about getting access down his drive to move the house on (TBC)
• Check with the Accountant about what sort of structure to purchase the house under
• Register a new company name
• Register the new company
• Apply to Inland Revenue (the tax department) for LAQC status
• Cash up the never-grew-over-10-years-superannuation
• Get to the bank to set up a new account and sign the loan documents
• Get to the solicitor to sign Company resolution and shareholder documents, the same bank loan documents again and arrange for the rest of the cash to be debited from our cheque account
• Put the house movers off til settlement day (they were chasing for the contract to be signed)

Sounds like a lot, but setting up a new company can all be done online at night time. The LAQC is Loss Attributing Qualifying Company. Definition: A type of company structure that enables company losses to be allocated to individual shareholders to reduce their personal income and taxation.

LAQC's are good for new start-ups and for owning a couple of rental properties, where the directors (us) typically have to outlay a lot of capital to get the business happening. Capital which isn't going to be tax deductable. There may also not be a positive return straight off and for the first few years the business will probably run at a loss. An LAQC provides for that loss to be carried through to the directors' individual tax returns.

Next week the government announces it's 2010 Budget which will clarify what changes are going to be made to dampen the amount of loss directors' of LAQC's have thus far been able to write-off against their personal incomes.

Settlement Day came and the section is ours! The house movers rang wanting to know what time we'd be out with their cheque, adding that they'd had another enquiry about the house... [what a crap sales technique that is: threatening potential buyer with loss of purchase duh!] Suppose they'll conclude that it worked, because we got out there before they closed and signed up for the house. Well it'd be a bit useless to have the section and not the house wouldn't it?

We have 10 weeks to get the building consent, after which time the house movers start charging us $100 per week storage! Better get a move on.