How are commercial leases different to residential leases?
Lease agreement Commercial leases are not subject to the residential tenancies act. With commercial property the relationship between tenant and landlord is captured in an agreement to lease (usually the Auckland District Law Society document) and the commercial terms can be negotiated between the parties without the interference of the residential tenancies act.
Outgoings (OPEX) Outgoings e.g. rates, insurance, body corp fees, water, electricity etc are all usually paid by the tenant over and above the rental.
Other advantages Tenants usually offer a long term lease (generally a minimum of 3 years with further rights of renewals), with the security of a personal guarantees or a bank bond and are obligated under the lease to reinstate (tidy up) the property at the end of the tenancy, to name a few.
Are there any tax advantages with commercial property?
Yes. Commercial property can currently be depreciated at 2% per annum, over the long term this is a significant tax advantage over residential property. In addition to this, any property-related expenses are tax-deductible.
What is the zoning at Papamoa Junction?
Papamoa Junction is located in a commercial zone. This means it is suitable for a multitude of activities such as office, retail, trade supply, medical, light industrial and high density residential. You can learn more about the Tauranga City Council’s commercial zone guidelines here.
Do I have to be registered for GST to buy in The Hatch?
All units will be sold on a plus GST (if any) basis and purchasers will need to be GST registered upon settlement to avoid paying GST (goods and services tax) in addition to the purchase price. The tenant will pay all rental and outgoings plus GST and therefore on a regular basis owners will have to do a simple GST return periodically to accompany GST payments to the IRD.
How do I secure a unit in The Hatch?
To purchase your desired unit, a $5,000 deposit (per unit) is payable upon signing an Agreement for Sale and Purchase.
When do I pay for the rest of it?
Upon issuance of the 224c certificate for the underlying land (practical completion of the subdivision – current estimate September 2021), 10% of the purchase price (less the $5,000 already paid) is due. The balance of the purchase price is due 5 days after both the Code Compliance Certificate (CCC) and title have issued for the unit you are purchasing (current estimate November 2022).