(i) need to make sure that the loan is treated as an onshore loan by the lender with interest being paid in NZ; or
(ii) deal with the non-resident withholding tax issue which means either (a) forgetting about tax deductibility in NZ or (b) paying non-resident withholding tax on the interest (bank will require a gross up) and filing some returns with the IRD in NZ.
My OCBC NZD loan is treated by the accountants as it would be in NZ and it's secured against the property. I submit the same annual interest statement to them as I would any NZ originated loan and they use that for deduction purposes with the IRD.
Are you taking about other types of loans?