News } TBK Capital

Retirement Villages – Tax Incentives

Readers of my Opportunities newsletters may remember a recent one that offered investment in a retirement village in Christchurch. One was briefly mentioned in my last Newsletter a couple of weeks ago.

Why wait any longer for the world to begin
You can have your cake and eat it too
Why wait any longer for the one you love
When he's standing in front of you.

Bob Dylan – Lay Lady Lay; interesting interpretations

Readers of my Opportunities newsletters may remember a recent one that offered investment in a retirement village in Christchurch. One was briefly mentioned in my last Newsletter a couple of weeks ago.

Well I’ve received a number of enquiries about this and the tax related benefits it offers investors. So, as Bob Dylan says above, why wait any longer for the rather unique paybacks this type and form of investment provides.

Many of you will remember the times of very high personal taxation in New Zealand. Examples include the infamous 1958 Black Budget and the tax reforms of the 1980s and subsequent years.

Most of these high personal tax rates have subsequently been removed. However for high income earners, and for funds, here is an investment that shows early year tax losses, followed by high income, which may be an attractive addition to your portfolio. Especially as its structure enables these losses to be carried forward and offset against other source taxable income.

The proposal is to provide the funds for the construction of retirement villages - which fulfil the above criteria - and as they are built and operated in stages, early sales provide the capital for the continuing development.

Retirement Villages

Tim Bartells, the promoter of this Village, has been a long-time client of TBK Capital and we have successfully financed a number of Retirement Village developments for him. Here is a recent interview with him posted on TVNZ.

Tim has two under way at the moment. The first can be seen here on our website and currently is being offered to our newsletter subscribers. The project is now highly advanced. Resource consent has been issued; the first 21 villas are under construction with 16 sold; and there is strong demand for more.

Note this is structured in a way that is extremely tax effective for investors. It results in Tax losses from Day 1 (which translate to an income stream) and the breakeven point is reached much sooner than a new Greenfield village. In short all benefits to investors are achieved immediately.

New village

This second village has not been promoted to our newsletter subscribers and will be offered to large or institutional investors - especially those who might be interested in becoming the sole investor/shareholder.  Accordingly it is an ideal passive investment for a fund.

The Village is in Putaruru and will be called Spring Water Country Estate (named for the 20 rivers in the region and the Blue Springs). It will consist of 254 units plus a large aged care facility - comprising rest home, hospital and a dementia facility.

The Offer is a 40% shareholding in this village being 40 shares at $200,000 a share. That investment is projected to return:

  • $10,000,000 tax free.

  • An annual income from resales of $3,600,000 once the village is mature.

  • An asset value on completion of $32,000,000.

Prior to completion of the Village, the shareholder is entitled to 40% of the tax losses - which due to the structure of the Offer - are able to be offset against other taxable income. So in the early years of development, while there is no return to investors, tax losses can be offset against other taxable income.

Passive investment

An investor in all these villages has a completely passive role. The promoter’s companies arrange the:

  • Debt funding.

  • Management of the complete development.

  • Ongoing management of the village.

This is a rare opportunity in New Zealand to invest in a License to Occupy retirement village on the ground floor; and reap the full financial benefits.

Tim, the promoter of the Offer, is very experienced with retirement villages. He is always happy to talk to potential investors and to explain in detail the project and the projected returns to investors from it.

For further information reply to this email or call me on 021 902 901.

Any reference above to investment is not an offer of financial products that requires disclosure under the Financial Markets Conduct Act 2013 (Act) and is available only to wholesale investors as defined by that Act. It is intended for distribution only to selected people to whom, under the relevant laws, it can be lawfully distributed. It cannot be distributed in any other jurisdiction, or to any other people. It is not an offer or solicitations in any jurisdiction in which such offers or solicitations are not authorised, or in which the person making such offers or solicitations are not qualified to do so, or to any person to whom it is unlawful to make such offers or solicitations. Any representation to the contrary would be unlawful. No action has been taken by any person that would permit a public offering in any jurisdiction where action for that purpose would be required.


John Paine B.Sc., Dip BIA
TBK Capital Limited
Level 10, 120 Albert Street
Auckland 1010, New Zealand
Phone +64 9 307 3257
Mobile +64 21 902 901


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