Step 1 - Buy the land (check)
Step 2 - Set yourself up as a company (check)
We are now officially Provecho vineyard, Ltd. Very exciting! It's just Greg and I - 50 shares each, but it is that first step that really makes things official.
We've set ourselves up as an LAQC or Loss Attributing Qualified Company. The "Loss" bit is the important word here. Essentially, as I understand it anyway, it takes advantage of the fact that we will be running at a loss for the first few years. The vineyard tax losses will be offset from our other income (from the jobs that I/we will need to do in addition to the vineyard... to service the debt that we are getting ourselves into), reducing overall the tax we need to pay. Meaning that we will be able to keep more of what we earn (less tax taken out of our paychecks). That's a great help - particularly considering that New Zealand income tax on wages is 33%. I'm not complaining. Public health care rocks, in my opinion. But we can use any extra that we can get right now.
So, we're a company. Now we need to start earning that status. Here is where everything starts to get a bit amorphous. We want to start taking steps toward getting grapes in the ground, but we also want to get something sorted so we can actually live on the land. Which do we do first? Can we do both? Do we just develop half the vineyard so we can build a house at the same time? This is where a business plan comes in.
To be honest, it is something that Greg and I have been putting off a bit. What we need to do is research, research, research and to the best of our ability price out every last post, wire, and vine. We need to price out developing half the land and developing all the land. Then we price out building some sort of house. (What we would like, what we could tolerate.) Once we have all these numbers, then it should all be a lot clearer. There is nothing like having all your options made clear to you in black and white.
Don't get me wrong. We have done this to some degree, but now we need to do it as accurately as possible. It's easy enough to say that we have 36 plantable acres - which will convert to a certain number of Pinot Gris, Riesling, and/or Gewurtstraminer vines... but it's quite another thing when you are geting ready to actually order those vines. You definitely don't want to order to few vines when it comes planting time.
Now is where the work begins.
We are now officially Provecho vineyard, Ltd. Very exciting! It's just Greg and I - 50 shares each, but it is that first step that really makes things official.
We've set ourselves up as an LAQC or Loss Attributing Qualified Company. The "Loss" bit is the important word here. Essentially, as I understand it anyway, it takes advantage of the fact that we will be running at a loss for the first few years. The vineyard tax losses will be offset from our other income (from the jobs that I/we will need to do in addition to the vineyard... to service the debt that we are getting ourselves into), reducing overall the tax we need to pay. Meaning that we will be able to keep more of what we earn (less tax taken out of our paychecks). That's a great help - particularly considering that New Zealand income tax on wages is 33%. I'm not complaining. Public health care rocks, in my opinion. But we can use any extra that we can get right now.
So, we're a company. Now we need to start earning that status. Here is where everything starts to get a bit amorphous. We want to start taking steps toward getting grapes in the ground, but we also want to get something sorted so we can actually live on the land. Which do we do first? Can we do both? Do we just develop half the vineyard so we can build a house at the same time? This is where a business plan comes in.
To be honest, it is something that Greg and I have been putting off a bit. What we need to do is research, research, research and to the best of our ability price out every last post, wire, and vine. We need to price out developing half the land and developing all the land. Then we price out building some sort of house. (What we would like, what we could tolerate.) Once we have all these numbers, then it should all be a lot clearer. There is nothing like having all your options made clear to you in black and white.
Don't get me wrong. We have done this to some degree, but now we need to do it as accurately as possible. It's easy enough to say that we have 36 plantable acres - which will convert to a certain number of Pinot Gris, Riesling, and/or Gewurtstraminer vines... but it's quite another thing when you are geting ready to actually order those vines. You definitely don't want to order to few vines when it comes planting time.
Now is where the work begins.
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