- What are the advantages of purchasing “off the plan”?
Buying “off the plan” means buying properties before completion. It usually takes 15 to 18 months to construct. Buying “off the plan” in Victoria saves a lot of stamp duties.
- What happen to my deposit?
Deposit will be with the Trust Account kept with the solicitors. In Australia, developers do not use any of your deposit during construction. They practice ‘Built and sell’ concept. The chances of properties being abandoned are slim as a pre sale of 50% is usually required before construction begins.
- Do foreigners need to obtain any approval before investment?
Yes, foreigners investing in Australia require FIRB (Foreign Investment Review Board) approval. It is usually obtained by the developers before contracts are signed. Foreigners can only invest in 50% of NEW project.
- Does buying property help me migrate?
No, investing in properties in Australia is not a criteria of migration.
- As a foreigner, can I obtain a mortgage?
Yes, foreigner can apply to Australian financial institutions for mortgage with appropriate documentations . Mortgage can also be obtained from other off shore banks through multiple currencies.
- Do I have to pay tax in Australia?
Yes. Investors will be required to submit a tax return in Australia , where depreciation, loan costs and interest costs are claimable as tax deductions and rental income is taxable income.
Tax agents are usually appointed to prepare and submit annual Australian tax returns.
- Who will take care of my property for leasing?
For investment property, a licensed agent is usually appointed to manage the rental of the property. Their fees ranged from 6 -7 % of the rental income.
- Will there be any tax on disposal of properties?
Upon disposal of properties, any net gains are subject to Capital Gain Tax.
- What are the types properties to avoid buying in Australia?
Student accommodation or service apartment that are less than 50 m2 are not usually favored by Australian Banks.
- What are the usual incidental costs of investment in Australian properties?
As a general rule investors should allow:
Legal fees: AUD$1,200 to $1,500
Loan Application and settlement fees: AUD$500 to $800
Valuation: Usually included in loan application
Property Stamp Duty: This is a state duty and varies for each state.