NZB Leasing & Finance: A Helping Hand for Breeders
31 July 2006
The widely publicised new tax measures in the New Zealand racing industry are set to apply for the first time at auction at the forthcoming New Zealand Bloodstock National Broodmare Sale at Karaka.
With the promised changes has come a revival of confidence in investing in the thoroughbred industry, and yet still the initial capital outlay at auction can be prohibitive for some investors.
New Zealand Bloodstock Leasing & Finance was established in 1997 with this in mind, and Leasing & Finance Manager, Ross Gwyn, says the forthcoming Sale is as good a time as there has ever been for buyers to purchase broodmares under the leasing system.
"Our facility offers buyers the ability to obtain a well credentialed filly or mare without the commitment of a large amount of capital. It's a sensible and user-friendly solution to the age old cashflow problem and the availability of lease finance provides the ideal opportunity to upgrade into a better pedigree with greater commercial appeal."
New Zealand Bloodstock's National Broodmare & Mixed Bloodstock Sale (August 6 & 7) is fast approaching, presenting a host of buying opportunities for those looking to upgrade their breeding stock and for those looking to get involved in the breeding industry for the first time.
Should a New Zealand breeder identify a filly or mare they wish to acquire, then provided the horse meets New Zealand Bloodstock's criteria, including principally 'enhancing the thoroughbred bloodstock of New Zealand', a lease option can be arranged with a prospective buyer in advance of the Sale.
The process is relatively straightforward; New Zealand Bloodstock purchases the horse on behalf of the breeder (who becomes the lessee) and lease it back to him/her.
"In most cases we can have approval of a formal application within 24 hours," Gwyn advises.
There are several advantages associated with leasing, foremost, reducing the level of cash required to acquire bloodstock, whilst it also enables breeders to be more responsive to a buying opportunity.
"Breeders can ensure they invest in the filly or mare they want, rather than passing up a golden buying opportunity as a result of not having freed up cash at the time," Gwyn added.
"It's important to note that any progeny of the leased horse will be owned by the lessee and the lessee will be recognised as the official breeder," Gwyn said.
Lease payments are tax deductible to breeders where the bloodstock in question is capable of being bred from at the inception of the lease and is intended to be used in the furtherance of a breeding business.
"We're happy to field any enquiries and assess an individual's suitability for the leasing facility, and with the Sale just around the corner, the sooner they get in touch the better," Gwyn said.
People on all scales of the breeding spectrum, ranging from first time breeders to some of the most prominent members of the thoroughbred fraternity have taken up the option to lease.
"We provide the facility to help promote investment inbroodmares, which is the backbone to the New Zealand breeding industry," Gwyn said.
There is renewed commitment and confidence in the New Zealand breeding industry as a result of boosts to the level of domestic stake money, which is expected to rise by some $13 million in the coming season.
In addition, a decrease in the maximum write-down period for broodmares from 8 years to 5 years (or 6 years for those few broodmares that commence breeding at age 2) has been implemented.
If you're interested in purchasing at any of the forthcoming New Zealand Bloodstock Sales and are considering financing those purchases via lease, contact New Zealand Bloodstock Leasing & Finance Manager, Ross Gwyn on (09) 298 0055 or lease@nzb.co.nz.