Australia is a developed country with the world's 12th largest economy. In 2012, Australia's capita per income was the world's fifth highest. Australia comprises the mainland of Australian continent, the island of Tasmania and numerous small islands.
To buy a completed property in Australia, you must have been a resident for at least 12 months or be buying in partnership with a resident if you meet certain conditions. If you do not qualify as a resident, you may still buy a newly developed property (uncompleted from housing developers).
Property Type
Residential ownership in Australia is usually freehold, unless it is in Canberra. Canberra is also known as the Australian Capital Territory (ACT) , where land or housing unit is leased to the purchaser for a period of 99 years under a “Crown Lease”. At the end of that period, the Crown Lease will usually be extended for the payment of an administration fee.
Restrictions
For resale property, owners can only resell their properties to the local residents. Under Australia's Foreign Investment Review Board (FIRB) rules, a foreigner needs permission from FIRB before they can purchase residential property in Australia.
Australian Visas
With the exception of Australian citizens, anyone entering Australia requires a visa. The Australian visa system is complex as there are many visa categories: apart from the Visitor category, there are also temporary resident (e.g. business long term or retiree visas), or permanent resident categories (e.g. Family Migration, Skilled Migration, Employer Nomination or Business Skilled). Each category has its own range of visa subclasses.
Notable Locations
Melbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia after Sydney. It is also home to approximately 4 million people. Melbourne is rated highly in education, entertainment, healthcare, research and development, tourism and sports.
Sydney is the state capital of New South Wales and the most populous city in Australia.
Brisbane is the capital and most populous city in the Australian state of Queensland and the third most populous city in Australia. Brisbane's metropolitan area has a population of 2.24 million, and the South East Queensland urban conurbation, centred on Brisbane, encompasses a population of more than 3 million.
Perth is the capital and largest city of the Australian state of Western Australia. It is the fourth most populous city in Australia, with an estimated population of 1.97 million living in Greater Perth. Located at the very edge of Western Australia, it boasts a modern city with a rich history and the best beaches in Australia.
Sydney is the state capital of New South Wales and the most populous city in Australia.
Brisbane is the capital and most populous city in the Australian state of Queensland and the third most populous city in Australia. Brisbane's metropolitan area has a population of 2.24 million, and the South East Queensland urban conurbation, centred on Brisbane, encompasses a population of more than 3 million.
Perth is the capital and largest city of the Australian state of Western Australia. It is the fourth most populous city in Australia, with an estimated population of 1.97 million living in Greater Perth. Located at the very edge of Western Australia, it boasts a modern city with a rich history and the best beaches in Australia.
Location rules
For investors, the best locations are usually in suburbs 4-8 km from the CBD. For standalone houses, the best locations tend to be a little further out, around 6-12 km from the central areas.
Financial Regulations for Foreigners:
When a person buys a property, the purchaser can pay the full amount for the property, or borrow part of the purchase price from a financial institution. In the latter case, in exchange for the loan, title in the property would normally be held by the financier as security.
| Loan*: | Up to 70% of purchase price | ||
| Tenure: | 25 years or Age of 75 (whichever is lower) | ||
| Interest rate: | 3M Sibor + 2.5% | (Loan in SGD) | |
| Or | |||
| 3M Sibor + [2.75% to 3.25%] | (Loan in AUD) | ||
*In order to qualify for loan, the property has to be more than 50 square metres in size.
Stamp Duty:
0.3% to 2.5% of the purchase amount, depending on where the property is. Annual land tax might also be imposed if property is worth more than a certain amount. The amount depends on property classification for tax purposes and property location.
Tax Incentive:
| Building write-off: | 25% of Building Value | |
| Depreciation value: | 15% of expenses required to maintain building. | |
| Borrowing expenses: | Depends on each case |
Residents:
Residents are taxed at a progressive rate on their annual income, from 0% to 45%. A 1.5% Medicare levy is also imposed.
Non-Residents:
The income tax rates for individuals ranges from 29% to 45% for non-residents.
Capital Gains
Individuals are subject to a 50% reduction of the taxable gain if the asset is held for at least 12 months. Capital gains follow the individual income tax rates, at rates from 29% to 45% for non-residents.
Inheritance
There are no direct taxes on inheritance.
Roundtrip transaction costs
All costs associated with opening and closing a financial or other transactions are usually 7% to 12% of the property value. The costs include registration fees, legal expenses, listing fees, agent's commission and transfer taxes. Stamp duty on property transfers ranges from 1.5% to 6.75%, and is paid by the buyer. The duration taken to complete the procedures needed to register a property takes around 10 to 11 days.
Source: OrangeTee.com retrieved 22 Aug 2014
