Aug 08, 2015
About Australia . . . . . . . . . . . . 1
Why Australia? . . . . . . . . . . . . 3
EconomyEducationQuality of LifeProperty Investment
Cities of Australia . . . . . . . . . . . . 11
SydneyMelbourneBrisbaneGold CoastAdelaidePerth
The Buying Procedure . . . . . . . . . . . . 17
Case Study . . . . . . . . . . . . 18
Tax in Australia . . . . . . . . . . . . 19
About The Property Party . . . . . . . . . . . . 20
Contents
Disclaimer
Published May 2015
All photographic content comes with approval from Dreamstime® and www.brisbanemarketing.com.au©.
This brochure has been prepared for educational purposes. It is not intended to provide exhaustive coverage of the topic. The information is made available on the understanding that The Property Party™ is not providing professional advice.
While all care has been taken in the preparation of this brochure, The Property Party™ does not accept any responsibility for any losses suffered by persons relying on information contained in this brochure or arising from any error or omission in the brochure. All research, data, statistics, and sources cited are used for illustrative and informational purposes only and do not constitute an endorsement of any company, organisation, or institute.
Copyright © The Property Party™ May 2015.
Australia is a strong candidate for overseas property investment. It is a First World country with a stable, resilient economy that has experienced positive growth each year since 1991. Australia is pro-free trade and holds bilateral agreements with many countries. It is one of the world’s leading exporters of natural resources and agricultural products.
The country welcomes foreign investment and is in need of increased housing supply, thus there is ample opportunity to invest in Australian property. Australia offers residents a quality of life that is virtually unparalleled: median household income is strong, healthcare and social services are world-class, and life expectancy is high. Australia welcomes overseas students into an outstanding higher education system that produces top-drawer graduates.
Finally, Australia offers a fantastic climate, award-winning beaches, an active outdoors lifestyle, multicultural cities, and diverse cuisine, not to mention world-famous landmarks such as the Great Barrier Reef and the Sydney Opera House.
So join The Property Party and learn more about what makes Australia a top destination for overseas property investment.
Welcome to Invest in Australia
▶ Three Government levels: Federal; State/Territory; Local
▶ Six key states ▶ ACT and NT are treated like states
▶ Deeply multicultural society ▶ Australians descended from peoples of
more than 200 countries ▶ Two or more languages spoken in 20%
of households ▶ Dynamic arts/theatre scenes on offer
▶ 23.7 million people ▶ 3 people per km2
▶ 1.5% annual population growth ▶ 60% of population growth is fuelled by
immigrants ▶ 25% of all Australians are born overseas ▶ National median age: 37.3
People
▶ 9.1 million private dwellings ▶ 2.6 people per household (av. total) ▶ $285 median weekly rent ▶ 1.7 motor vehicles per dwelling ▶ Home ownership is key to the Australian
Dream
Homes
Economy Government
Culture
▶ High-income, services based ▶ 13th largest economy worldwide ▶ US$1.5 trillion GDP ▶ US$64,863 GDP per capita
Geo-Climate
▶ 6th largest country in the world ▶ 7.69 million km2 surface area ▶ Tropical climate: Northern Australia ▶ Temperate climate: Southern Australia ▶ Semi-arid/desert climate: Central
Australia ▶ Extremely diverse geography
About Australia
Australia is a truly unique country. The nation that is also a continent is one of the largest in the world by geographical surface area, yet simultaneously one of the least populated. In spite of this Australia is highly developed and urbanised; particularly its capital cities.
Moreover, despite its relatively small population Australia has emerged as one of the world’s biggest economies and a world-leading export nation, as well as a significant presence on the international political scene.
© 2015 The Property Party Inc1
+8 hours(UTC +8)
+9½ hours(UTC +9 ½)
+10 hours(UTC +10)
Time Zones
▶ The national currency is the Australian dollar (AUD)
▶ The dollar note comes in denominations of $5, $10, $20, $50, and $100
ACST Australia Central Standard Time
AEST Australia Eastern Standard Time
AWST Australia Western
Standard Time
QLD
NT
WA
SA
NSW
ACT
TAS
VIC
Hobart
Melbourne
Brisbane
Adelaide
PerthSydney
AustraliaCapitalTerritory
Tasmania
Victoria
New South Wales
South Australia
West Australia
Queensland
NorthernTerritory
Canberra
Darwin
Currency
Main Languages
1 English (76.8%)
2 Mandarin (1.6%)
3 Italian (1.4%)
4 Arabic (1.3%)
5 Cantonese (1.2%)
12
9 3
Australia is made up of 8 key states and territories
Did you know...
About Australia 2
Australia offers a highly attractive economic and investment environment. The country is financially free, it actively encourages business and investment, and transparency levels are high.
largest economy globally
▶ US$1.8 trillion in investment fund assets (2013)
▶ 11th largest stock exchange globally by domestic capitalisation (2014)
▶ US$37.6 billion in exported products (2013)
▶ A world leader for agricultural exports
▶ 7.1% of world’s overseas students enrol in Australian higher education (2012)
▶ No.4 destination worldwide for foreign students
▶ US$161.6 billion (2013) ▶ A world leader for metal exports,
coal, and natural gas
Economy
13th
Wealth Management
Agribusiness
Education
Fuels & Mining
Strong Economy
▶ Australia has posted positive economic growth every year since 1991
▶ During this period it averaged 3.3% annual growth
▶ AAA certified by all “Big Three” credit rating agencies
▶ 4th freest economy in the world – Heritage Foundation, 2015
▶ 3rd in the world for the soundness of its banks – World Economic Forum, 2014/15
▶ 11th most transparent economy worldwide – Transparency International, 2014
Key Industries
Received
US$592billion
in FDI in 2013
© 2015 The Property Party Inc3
▶ International Tourism Expenditure was US$284 billion (2013)
▶ No.8 globally
▶ Infrastructure ▶ Construction ▶ Real Estate ▶ Scientific and Technical Services
Why Australia?
Fair TradeGlobalMembership
Free TradeNation
Tourism
Other Doing Business
▶ 2.1 million businesses in Australia ▶ 18,000 plus registered foreign
companies ▶ Setting up a business takes just one
procedure ▶ Excellent protection of legal rights ▶ One of the least corrupt
countries globally ▶ The financial services sector has assets
of almost A$6.4 trillion ▶ Australia is the 2nd largest liquid stock
market in the Asia region
Why Australia?
▶ UN ▶ G20 ▶ Commonwealth ▶ OECD ▶ WTO ▶ APEC ▶ ASEAN
▶ USA ▶ Chile ▶ New Zealand ▶ Malaysia ▶ Singapore ▶ Thailand ▶ Korea ▶ Japan ▶ China
Easy
Australia’s US$1.5 trillion nominal GDP equals 2% of the global economy – Australian Trade Commission
Why Australia? 4
Education
Fast Facts
▶ School attendance is compulsory by law ▶ Children generally attend school from age
5-18. ▶ Australia had the world’s highest second-
ary education enrolment rate for 2014/15 ▶ 40% of Australia’s workforce holds a
tertiary qualification or advanced diploma ▶ Australia National University is Australia’s
top institute in the QS 2014/15 rankings
Higher Education
▶ University admission follows 13 years of education, though alternative pathways do exist
▶ 38 public universities and 3 private universities exist in Australia
▶ 33 Universities reached the QS World University Rankings 2014/15
▶ 7 Australian cities named in the QS “Best Student Cities 2015” global top 50 list
TAFE
▶ Means “Technical and Further Education” ▶ Offers professional courses in many fields,
including Finance, Engineering, and IT ▶ Colleges and institutes are located all over
Australia
VET
▶ Means “Vocational Education and Training” ▶ Trains people to join or re-join Australia’s
workforce ▶ Helps people to upgrade work skills or
change careers ▶ Is typically offered by Registered Training
Organisations (ROTs) ▶ 135,000 overseas students enrolled in
2013
Language Courses
▶ Australia offers ”English Language Intensive Courses for Overseas Students” (ELICOS)
▶ 114,000 overseas students enrolled in ELICOS in 2013
▶ Select TAFE and VET providers also provide English courses
▶ Australia is an excellent environment for overseas students looking to learn English
Australia has an excellent education system that produces highly qualified graduates. The country is also one of the world’s leading destinations for overseas students. Australia’s education system is a major reason why its workforce is one of the best educated, multi-
cultural, and multilingual in the world.
World’s4th mostpopular country
for foreignstudents
– Australian Trade Commission
© 2015 The Property Party Inc5
Why Australia?
State/Territory
TotalStudents
Overseas (%)
New South Wales 406,000 21Victoria 344,000 32Queensland 230,700 21Australia Capital Territory 37,000 25South Australia 90,200 25Western Australia 138,100 26Northern Territory 10,800 10Tasmania 26,900 17
State/Territory
QSRanking
Overseas Students
Australian National University
25 5,500
University of Melbourne 33 14,100University of Sydney 38 12,200University of Queensland 43 11,500University of New South Wales
48 13,100
Monash University 70 22,100University of Western Australia
89 5,200
University of Adelaide 100 6,900
International Students
▶ 25% of all students in Australian higher education hail from overseas
▶ 4th most popular destination globally for overseas students in tertiary education
▶ A$15 billion was paid by overseas stu-dents into Australian education in 2013
▶ The “Education Service for Overseas Students Act” (ESOS) protects over-seas students’ rights
Group of EightThe “Go8” is a coalition of Australia’s most prestigious research universities. Go8 universities are distinguished from other Australian tertiary institutes in the follow-ing ways:
▶ More research-intensive ▶ Attracts the top industry and
government grant funding for research ▶ Best top-tier institutions in Australia
according to international surveys ▶ Produced every Nobel Prize winner
educated at an Australian university ▶ Lower student-staff class ratios ▶ Attracts highest performing Australian
and overseas students ▶ Alumni earn key positions in
professional life, business, and government in Australia and abroad
Australia has the 9th best scientific institutions worldwide – World Economic Forum “Global Competitiveness Report 2014-15”
Source: Department of Education and Training, 2014
Sources: QS “World University Rankings 2014-15”; Department of Education and Training, 2014
Why Australia? 6
Australia is widely regarded as one of world’s most liveable countries thanks to its excellent healthcare and social services systems, civil freedoms, sunny climate, active lifestyle, strong spending power, high life expectancy, and overall work-life balance.
Quality of Life
Living Standards
▶ First world country ▶ 5th highest GDP per capita income
globally ▶ Highly developed, urbanised cities ▶ 1,736 ultra-high net worth individuals in
Sydney, Melbourne, Perth, and Brisbane alone
Activities
▶ Hundreds of landmarks and attractions ▶ Competitive sport-oriented society ▶ Theme parks for families ▶ Diverse geography for outdoors
enthusiasts
Lifestyle ▶ Sunny climate countrywide ▶ Relaxed approach to life ▶ World-class beaches ▶ Strong consumer culture
Healthcare ▶ Healthcare, or “Medicare”, is universal and
publicly funded ▶ Facilities and healthcare professionals are
world-class ▶ 4th largest superannuation system
globally ▶ 82 years average life expectancy
Popularity ▶ Australia attracts millions every year ▶ 6.1 million international visitors in 2013/14 ▶ 7.6% annual tourism growth on previous
year for 2012/13 ▶ 70% of visitors came from Asia
Culture
▶ Multicultural society ▶ Famous for wines and viticulture ▶ Excellent arts, theatre, and music scenes ▶ 19 UNESCO World Heritage Sites
Australia ranks 2nd worldwide for human development – United Nations Development Program
“Human Development Report 2014”
© 2015 The Property Party Inc7
World’s Happiest Country
Australia is Top 10
globally for long life
expectancy
– OECD “Better Life Index
2014”
– World Economic Forum “Global Competitiveness
Report 2014/15”
Why Australia?Australia is the 2nd best country in the world in which to be born Economist Intelligence Unit – “Global Competitiveness Report 2014-15”
Why Australia? 8
Depreciating Currency
▶ AUD has depreciated against the USD (see Chart 1)
▶ At the start of May 2015 the AUD fetched 78 US cents
▶ This increases purchasing power for foreign investors (see Table 1)
▶ Cross border capital flows increase due to AUD depreciation
▶ This in turn drives higher sales volumes and asset prices
Rapid Population Growth
▶ Immigrants comprise 60% of Australia’s population growth
▶ Australia has one of the most urbanised populations globally
▶ In 2003, inflows of high net worth individuals into Australia totalled 22,000
▶ In 2013, inflows of high net worth individuals into Australia totalled 158,300
▶ No.2 destination for Asian investors globally
Property Investment
Australia is an excellent destination for property investment. The country offers excellent investment options, it has an environment conducive to property growth, and investors are in a solid position to profit from their investment. As a result, Australia today is a
leading destination for Asian property investors.
InternationalCurrency
1st May 2013
1st May 2015
Difference%
1st May 2013
1st May 2015
AUD/CNY 6.34 4.85 23.5 3,170,000 2,425,000AUD/HKD 7.98 6.05 24.1 3,990,000 3,025,000AUD/MYR 3.12 2.80 10.2 1,560,000 1,400,000AUD/SGD 1.26 1.03 18.2 630,000 515,000
Source: XE.com
Table 1: Example of Potential Savings due to Depreciated Currency
Currency appreciation against AUD AUD $500,000 property
14 Reasons to invest in Australian Property1. Capital growth
2. Real, tangible asset
3. You control your investment
4. You can own as a non-resident
5. It gives you options (e.g. live in or let out)
6. Transparent laws, rules, and regulations
7. Strong property protection rights
8. Property prices are stable
9. Safe investment
10. You can mitigate risk (e.g. insure it)
11. It is subject to high building standards
12. Anyone can invest in Australian property
13. Home ownership is highly valued in Australia
14. There are potential tax benefits
© 2015 The Property Party Inc9
Strong Housing Demand
▶ Most Australians live in major cities ▶ Population growth is among the
OECD’s highest (see Chart 2) ▶ There is a significant housing shortfall ▶ Millions of Australians rent to live ▶ There is significant demand for
rentable property ▶ Property investors benefit from
sustained demand ▶ Property price growth is expected to
continue (see Table 2)
Significant Investment Visa
▶ This visa offers immigration through investment
▶ AUD $5 million investment minimum ▶ Permanent residency is attainable
within four years ▶ A state government nomination is
needed to apply ▶ Applicants must also comply to
additional criteria ▶ For more details visit www.immi.gov.au
Why Australia?
In May 2015 the Reserve Bank of Australia cut interest rates to a historic low of 2%
Did you know...
CapitalCity
House Price ($)
Growth Rate (%)
Sydney 690,000 13.9Melbourne 518,000 5.6Brisbane 445,000 2.7Adelaide 405,000 2.2
Perth 513,000 -0.1
Table 2: Median House Prices and YOY Growth
Chart 1: The Fluctuating Australian Dollar
Chart 2: Population Growth
Note: Median prices are based on sales over the three months to March 2015 and the figure is the combined median for houses and units. Percentage growth is calculated on the change in the RP Data -Rismark Home Value Index between 31 March 2014 and 31 March 2015.Source: RP Data
US$
2006 2009 2012 2015
USD per 1 AUD
1.00
1.15
0.85
0.70
100
198
2
198
4
198
6
198
8
199
0
199
2
199
4
199
6
199
8
200
0
200
2
200
4
200
6
200
8
2010
2012
200
300
400
500Total Growth
Pe
op
le (‘
00
0)
Natural Growth
Net Overseas Migration
Source: ABS
Source: XE.com
Why Australia? 10
Sydney
Sydney surrounds one of the world’s largest natural harbours and spreads west towards the Blue Mountains. The
city has a population of 4.8 million. Sydney is Australia’s most iconic city, famous for the Sydney Opera House, its great climate, beach culture, and many other attractions. Sydney is one of the most multicultural cities in the world.Sydney is one of Asia-Pacific’s leading
financial centres and it houses key institutions like the Reserve Bank of Australia and the Australian Stock Exchange. Sydney is Australia’s strongest hub for business and hosts the headquarters of 40 per cent of Aus-tralia’s top 500 companies. It is also one of the country’s leading centres for education. Its excellent infrastructure includes Australia’s busiest airport, which serves 37 million a year.
▶ Why Sydney?
Great climate
High quality of life
Australia’s top economy
Key global city
Top city for the super-rich
Hugely multicultural
Student city
Green city
▶ Australia’s top financial and business centre
▶ Biggest home for Australia’s super-rich
▶ 4th best student city globally, says QS ▶ Four universities in the top 300 – QS
▶ One of Australia’s sunniest capitals ▶ Warm-to-hot summers; mild winters
Climate
▶ 10th most liveable city globally – Mercer ▶ Green city status – The Economist
Liveability
Global Importance Finance
Education
▶ Certified a key “Alpha+” global city – GaWC
▶ Hosted the 2000 Summer Olympics
City ▶ State capital of New South Wales ▶ Biggest city in Australia
© 2015 The Property Party Inc11
Top quality of life
Financial centre of Victoria
Global city
Capital of culture
Outstanding infrastructure
Ultimate sports city
Top student city
Green City
Melbourne
Melbourne is situated on the natural bay of Port Phillip near the Yarra River estuary. The city has a population
of 4.4 million. Melbourne is Australia’s cul-tural capital and offers many outstanding art, theatre, and musical attractions. Melbourne performs highly in global liveability surveys every year. It has been voted the world’s top sports city by Sports Business International.
Melbourne is the financial centre of Victoria and hosts key Australian institutions including the headquarters of ANZ and National Austral-ia Bank, and the Federal Government’s Future Fund. Melbourne is Australia’s top destination for higher education. It also provides Australia’s busiest general cargo seaport and the world’s largest urban tram network, as well as Melbourne Airport, which serves 30 million people a year.
▶ Held the 2006 Commonwealth Games ▶ Hosted the 1956 Summer Olympic
Games
▶ 2nd best student city in the world – QS
▶ 90,000 overseas students in higher education
▶ Relatively cool, wet weather ▶ Warm-to-hot summers; cold-to-mild
winters
Climate
▶ No.1 most liveable city globally – The Economist
▶ Top city for human capital and lifestyle – fDi
Quality of Life
Global Importance Major Events
Education
▶ UNESCO City of Literature ▶ Certified an “Alpha-” global city
– GaWC
City ▶ State capital of Victoria ▶ 2nd biggest city in Australia
▶ Why Melbourne?
Cities of Australia 12
Brisbane
Brisbane is situated along the Bris-bane River, between Moreton Bay and the Great Dividing Range. Brisbane
has a population of 2.1 million. The city and its surrounding area offer a sunny climate, high quality of living, beaches, nightlife, and popular art and theatre scenes. Major tour-ism destinations like the Gold Coast and the Sunshine Coast are accessible via Brisbane.
Brisbane is the financial centre of Queensland and one of Australia’s fastest growing cities. Property is more competitively priced than in either Sydney or Melbourne. Brisbane is one of Australia and Asia-Pacific’s top cities for stu-dents in higher education. The city provides ex-cellent infrastructure that includes the nation’s fastest growing seaport and its third-busiest airport, which serves 21 million people a year.
▶ Green City status – The Economist ▶ Clean city; many parks and waterways
▶ 23rd best student city in the world says QS
▶ Three universities in world’s top 350 – QS
▶ One of Australia’s sunniest capitals ▶ Hot, humid summers; dry, warm winters
Climate
▶ 36th best city most liveable city globally – Mercer
▶ Coolest city in Australia according to Lonely Planet
Liveability
Global Importance Environment
Education
▶ Hosted World Expo 1988 ▶ Held 2014 G-20 Summit
City ▶ State capital city of Queensland ▶ 3rd biggest city in Australia
Great climate
High quality of life
Financial Centre of QLD
Rapidly growing population
Global City
Student city
Green city
Coolest city in Australia
▶ Why Brisbane?
© 2015 The Property Party Inc13
Gold Coast
The Gold Coast is situated in the southeast corner of Queensland about 69 kilometres south of Brisbane and has a population
of 500,000. The city is the theme park capital of Australia and hosts the likes of SeaWorld, Movie World, and Dreamworld. It is also known for its many golf courses, sunny climate, and popular beach resorts, such as Surfer’s Paradise. The city will host the 2018 Commonwealth Games.
The Gold Coast attracts 12 million visitors each year. Tourism is important to the city’s economy, as are the rapidly growing hospi-tality, entertainment, and real estate sectors. Property has seen a rsurge in foreign invest-ment, particularly from China. The city offers relatively low living costs and a supportive busi-ness environment. The Gold Coast is connect-ed to major Australian cities by air and highway.
▶ 57km of beaches ▶ Famous theme parks, beaches, and golf
courses
▶ Two universities in the top 500 – QS ▶ Situated close to student city, Brisbane
▶ Fantastic year-round climate ▶ Hot, humid summers; warm winters
Climate
▶ 12 million visitors a year ▶ Major foreign property investment target
Economy
Global Importance Attractiveness
Education
▶ Home to the 2018 Commonwealth Games
▶ Hosts the PGA Australia Championship
City ▶ 6th biggest city in Australia ▶ Largest non-capital city
Great climate
City of beaches
Golfer paradise
Theme park capital
Rising global importancezzzz
Low cost environment
Major foreign investment target
Several excellent universities
▶ Why Gold Coast?
Cities of Australia 14
Adelaide
Adelaide is situated on the Adelaide Plains between Gulf St Vincent and the Mount Lofty Ranges. Adelaide
has a population of 1.3 million. Adelaide is a planned city known for its wide boule-vards, parklands, and great festivals. It offers a great nightlife, cuisine, and ready ac-cess to a host of nearby beaches and islands.Adelaide is Australia’s leading wine destination,
hosting famous wine producing regions like the Adelaide Hills and Coonawarra. Adelaide hosts the National Wine Centre’s “Wined Bar”, which offers Australia’s largest selection of pre-mium wine by the glass. Adelaide is also nota-ble as the nation’s most affordable capital for living costs and real estate. Adelaide is also efficiently connected: commuting from Adelaide Airport to the city centre takes just 15 minutes.
▶ Green city status – The Economist ▶ 70km of pristine beaches
▶ 29th= student city globally, says QS ▶ Three universities in world’s top 500
– QS
▶ One of Australia’s sunniest capitals ▶ Hot, dry summers; mild winters
Climate
▶ 2nd most liveable Australian city – The Property Council of Australia
▶ 5th most liveable city globally – Mercer
Quality of Life
Leisure Environment
Education
▶ 9th best travel destination worldwide – Lonely Planet
▶ Most live music bars/clubs per capita in Australia
City ▶ State capital of South Australia (SA) ▶ 5th biggest city in Australia
Top quality of life
Wine capital of Australia
Financial Centre of SA
Competitive property prices
Planned city
Student city
Green city
Festival city
▶ Why Adelaide?
© 2015 The Property Party Inc15
Perth
Perth is situated on the Swan Coastal Plain, which lies between the Indian Ocean and the coastal escarpment of Darling
Scarp. Perth has a population of 2 million. The city offers one of Australia’s finest climates plus many bars, cafes, restaurants, and pris-tine beaches. Perth is also located near Swan Valley, which is known for its excellent wines.Perth has great prospects. It is Australia’s
fastest growing city and has seen rapid economic growth in recent years. Perth is the financial centre of Western Australia, which is the nation’s leading state for natu-ral resource extraction and a key part of Australia’s export strategy. The city provides excellent infrastructure and acts as the in-ternational hub for Western Australia. Perth Airport serves 13 million people a year.
▶ Green City status – The Economist ▶ Clean city; many parks and waterways
▶ 38th best student city globally, says QS ▶ Three universities in the top 600 – QS
▶ Sunniest capital in Australia ▶ Hot, dry summers; mild, wet winters
Climate
▶ 9th most liveable city globally – The Economist
▶ Most restaurants per capita in Australia
Quality of Life
Economy Environment
Education
▶ Hub for resource processing and export ▶ No.3 city for the country’s super-rich
City ▶ State capital of Western Australia ▶ 4th biggest city in Australia
Best climate in Australia
High quality of life
Financial capital of WA
Key city for the super-rich
Fastest-growing Australian capital
Restaurant capital of Australia
Student city
Green city
▶ Why Perth?
Cities of Australia 16
The Buying Procedure
▶ Work out your investment motivations and your preferred property type
▶ Submit an expression of interest ▶ Send a small deposit
(AUD $5,000)
▶ Appoint a solicitor to handle your transaction
▶ 50% of a solicitor’s fee is paid on appointment
▶ Execute the Sales and Purchase Agreement
▶ Pay the balance deposit (10% of the purchase price)
▶ Seek mortgage preapproval ▶ Do this if you are borrowing
from a bank ▶ Do this 3-5 months prior to
settlement
▶ Appoint a rental manager ▶ Do this is if you plan to rent out
the property
▶ Settlement ▶ Pay the remaining 90% of the
purchase price
▶ Complete a depreciation schedule
▶ Engage an experienced accountant
▶ Continue to collect rent ▶ Pay expenses
▶ Search for a property
▶ Select a property
▶ Repeat!
Buying property in Australia is subject to government procedures, rules, and regulations. The following procedure is typical for investing in new property in Australia. We recommend that you consult a specialist
and perform your own due diligence before purchasing property overseas.
Start
© 2015 The Property Party Inc17
Case Study
Mandy is the 35-year old director of an international company head-quartered in Hong Kong. Mandy is
a hard-working high-middle income earn-er who has recently developed an interest in property investment overseas. She has a particular interest in investing in Austral-ian real estate (Sydney in particular) as her brother recently purchased a property there and was very satisfied with his investment.
Mandy wants to buy a two-bedroom apartment of no more than AUD $850,000 in a vibrant part of Sydney that is well-connected by public transport. She begins her search online and contacts several reputable local agents who send her options in different parts of the city’s central and suburban areas. She selects an apartment in the CBD valued at AUD $835,000 and pays the requisite AUD $2,000 holding deposit.
Before signing the contracts, Mandy finds The Property Party, which helps custom-ers make savings on their overseas property acquisitions. She contacts the head office and arranges to attend one of their events, where she learns a lot more about different markets in Australia. She plays the game to educate herself and to experience property buying and selling. By doing so, she learns the core aspects of investing in Australia:
▶ The purchase process; ▶ The importance of rental return and
capital growth; ▶ Different demand drivers to consider
when selecting a property for investment; ▶ Financial aspects, such as net and gross
return, and other expenses and benefits a property can bring
By applying this new knowledge, Mandy decides not to commit to her original pur-chase. Instead, she locates a different apart-ment in an up-and-coming neighbourhood
that she feels offers better prospects. She pays AUD $780,000 for the property. Mandy is still in need of additional assistance, so The Property Party helps by building a property in-vestment team around her, including the following:
▶ A solicitor; ▶ A mortgage broker; ▶ A rental agent
Mandy learned from The Property Par-ty. As a result, she saved thousands of dollars in buying costs and made a wise invest-ment decision. Moreover, she has developed confidence in her ability to invest in overseas property. Her investment team will manage the property and ensure that it maximises its rental income and growth potential. This enables Mandy to profit from her investment whilst enabling her to focus on her career and enjoying peace of mind.500,000 USA
Education is key to making smart investment choices for investing in property in Australia. We recommend that you consult a specialist and perform your own due diligence before purchasing property overseas.
The Buying Procedure 18
Ways to deduct tax liabilityAcquisition and Maintenance Costs
▶ You can offset expenses relating to your investment property against rental income
▶ Examples: Bank fees, advertising for ten-ants, legal and tax-related expenses, etc.
Depreciation Allowances ▶ Landlords are eligible to claim deprecia-
tion on newly purchased items ▶ Examples: Appliances, blinds, carpets,
furniture, hot water systemNegative Gearing
▶ Negative gearing allows losses on your property to be deducted from your gross income
▶ This creates a reduction in your tax liability
Stamp Duty ▶ This tax is payable on the transfer of
Australian property ▶ Rates vary by tax brackets and by state
Property 1 Property 2A$450,000 A$700,000
State Payable Duty Payable DutyQLD A$14,175 A$24,525VIC A$22,070 A$37,070
NSW A$16,061 A$27,311SA A$22,260 A$37,647WA A$15,800 A$27,265
Income Tax ▶ You need to pay tax on income (e.g. rent) ▶ Residents tax: 0% - 45% ▶ Non-residents tax: 32.5% - 45% ▶ Medicare: 2% extra (residents only)
Capital Gains Tax (CGT)
▶ CGT is payable on profit made from selling your property
▶ The rate is the same as the income tax rate you pay
▶ 50% discount applies if you sell after 12 months’ ownership
▶ Inheriting then selling a deceased person’s home is CGT exempt
▶ The inheritance rule does not apply to foreign residents
Land Tax ▶ This is an annual payable state tax ▶ It is based on the taxable value of your
land ▶ The value of your property is NOT
affected by land tax ▶ Some properties are free from this tax
Ta小x in Australia
For more information about national and state taxes in Australia visit:
National taxes – http://www.ato.gov.au QLD – https://www.osr.qld.gov.au/
VIC – http://www.sro.vic.gov.au/NSW – http://www.osr.nsw.gov.au/
SA – https://www.revenuesa.sa.gov.au/WA – http://www.finance.wa.gov.au/
Australian residents are taxed on their worldwide income, although Australia has double taxation agreements with many countries. Most foreign income is tax exempt for foreign residents, and foreign
residents are generally taxed only on their Australia-sourced income.
State Land Tax Starting PointQLD A$600,000VIC A$250,000
NSW A$432,000SA A$316,000WA A$300,000
© 2015 The Property Party Inc19
About The Property Party
Our primary purpose is to educate prospective buyers about real estate opportunities in many different countries. We aspire to provide buyers with the tools they need as well as the k n o w l -
edge and the confidence necessary to make key investment decisions.
WHICH STRATEGY SHOULD I USE?
Through our approach you can see for yourself. Will
you choose an aggressive, high capital growth strat-
egy, a stable rental return, or a balanced portfolio? Break it down and see
what works for you. The choice is yours.
THERE ARE TOO MANY OPTIONS!
There are millions of investment property
options around the world. Our approach enables you
to pinpoint the right investment by exploring
different options across a range of countries, cities,
and investment types.
EXPLORE DIFFERENT SCENARIOS
We have created a huge range of scenarios and missions to help you ex-plore the global property market. Try it out and see what works for you. You can even challenge your
friends and family to deter-mine the ultimate investor.
WHAT HAPPENS IF...
You decide to sell; to buy in Brisbane instead of
London; or choose growth over return? We have devised methods that
enable you to test outcomes for many
scenarios while remaining risk free and in control.
SIMULATING PROFIT AND LOSS
We simulate a full range of buying, maintaining, and
selling costs. Your participation will
enable you to learn the essentials quickly and to evaluate the performance
of each investment.
GROW YOUR PORTFOLIO
Immerse yourself in the evolution and growth of
your portfolio. We offer the power to track the performance of each
property and the quality of your every investment.
About The Property Party 20
SourcesOur educational materials utilise research from a wide variety of respected sources. For a complete list of the sources used in this publication, please visit our website.
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