Q1. When is it appropriate to invest in property?
Q2. I've been looking for a property for a long time, should I now wait before buying as prices seem to have recently gone up?
Q3. Is GST Payable on the purchase of an established residential property?
Q4. What is Negative gearing?
Property Management & Rental
Q5. Who will look after my investment property?
Q6. What if my property won't rent?
Q7. What are the expenses for investment properties?
Q8. What are the property manager's fees for permanent letting?
Q9. What are the property manager's fees for holiday letting?
Q10. How do I pay the expenses?
Q11. Is GST payable on residential rent?
Q12. What is "Safety Net Planning"?
Q13. How do I get Safety Net Planning, and how much does it cost?
Accounting & Tax
Q14. Do I pay Land Tax in Queensland?
Q15. Do I pay Income Tax?
Q16. What Are Property Tax Allowances?
Q17. Do I really need an accountant?
Q18. How do I find and accountant, and how will I know if they are the right one?
Q19. How much do they charge?
Q20. What expenses are tax deductible to minimise tax on income I receive?
Finance
Q21. How much deposit do I need?
Q22. How long are they tax deductible for?
Q23. How do I arrange Finance?
Q24. When should I arrange Finance?
Q25. How much do most financial institutions charge?
Law
Q26. When I purchased an investment property in Queensland, do I need a Queensland Solicitor?
Q27. What happens to my deposit money, and other fees once paid?
Q28. Who keeps the interest earned on my deposit money?
Q29. Am I entitled to a cooling off period, if so for how long?
Q30. When does the cooling off period start?
**********************************************************************************************************************************
Purchasing a Property
Q1. When is it appropriate to invest in property?
A. Property investment has always been a popular form of investment. In fact, property, in the form of the family home, is one of the biggest investments that most of us have, or will make, in our lifetimes.
Historically, investing in property has delivered good returns above inflation. An investment in property is an excellent way of protecting the value of your savings against inflation because it can return capital growth over the long term.
Q2. I've been looking for a property for a long time, should I now wait before buying as prices seem to have recently gone up?
A. If you intend to be a property 'investor' as opposed to a property 'trader' you probably should not wait any longer. A 'trader' buys today, and sells very quickly for a profit. A 'investor' on the other hand, is buying for long term rental income, capital growth and tax benefits.
As long as you pay fair market price, which can easily be determined by the level of sales activity in the project you are considering, you should still achieve sound capital and rental growth over the long term.
If fact, some analysts believe that the real upturn in the market may in fact be in the latter half of this decade.
Q3. Is GST Payable on the purchase of an established residential property?
A. No, GST is not payable on the sale of an existing family home or when a private individual sells a property.
GO TO TOP
Q4. What is Negative gearing?
A. When the interest rate on the borrowed funds used to purchase an asset or make an investment is higher than the expected income yield on the investment, the practice is called negative gearing. The investor may be able to offset the loss against other taxable income.
Property Management & Rental
Q5. Who will look after my investment property?
A. To make your property investment a profitable one, you need the right team working for you. We have an experienced property management department that are more than happy to take care of you and your investment property for life.
Q6. What if my property won't rent?
A. It is impossible not to rent a property... big statement but it's true. If the rental amount is right, it will rent. Be flexible in your rents and consider the condition of that property. Also take into account the variation to tax benefits received or paid. Insurance and safety net planning gives you total control and security. There are over 6,000,000 tenants and this number is growing everyday but only 6% of Australian's own investment properties. People live with other people not because they want to but because they have to.
Q7. What are the expenses for investment properties?
A. Council rates, water charges, Insurances, body corporate fees, repairs and maintenances, property manager's fees.
Q8. What are the property manager's fees for permanent letting?
A. Property managers in Queensland generally charge 7.5% plus 10% GST and the first week's rental. There is also a $5 per month statement fee.
Q9. What are the property manager's fees for holiday letting?
A. If letting for holiday purposes, charges are generally 12.5% of all incoming rent plus $5 per month statement fee, and additional expenses such as electricity bill, linen hire, etc.
Q10. How do I pay the expenses?
A. Our property management department can organise for these to be paid from your rental account or direct debit from your Australian bank account.
GO TO TOP
Q11. Is GST payable on residential rent?
A. No, a landlord cannot charge GST on residential rent, nor can the landlord claim an input tax credit for the GST charged on outgoings relating to the property.
Q12. What is "Safety Net Planning"?
A. Safety Net Planning covers everything to insure that northing goes wrong with your investment, some of the protection available is:
- Undue departure of tenant - 6 weeks rent;
- Default of payment - 15 weeks;
- Denial of access - 26 weeks;
- Prevention of access - 52 weeks;
- Premises untenantable - 52 weeks;
- Legal expenses - $5,000
- Loss of rent - up to $1,000 per week
Insurance policy provides contents insurance owned by you and for the specific use of tenant. Content items are insured against loss resulting from a range of elements.
You will also be paid up to $50,000 for any one loss for malicious damage or theft by all persons including tenants and their invitees. Your legal liability as a landlord is covered to $10,000,000. The preceding is all part of our service and part of the safety net planning. Insurance expense is also tax deductible. and costs approximately $225 per year per property. You may never use it but it's a must to have.
Q13. How do I get Safety Net Planning, and how much does it cost?
A. The cost is approximately $225 per year per property. You may never use it but it's a must to have, our property Management department can organise this for you.
REMEMBER ALL PROPERTIES RENT. IT'S ONLY A MATTER OF FOR HOW MUCH.
Accounting & Tax
Q14. Do I pay Land Tax in Queensland?
A. Yes - But only on UCV i.e. Unimproved Capital Value. The threshold in Queensland is $160,000 before any fee is charged.
Q15. Do I pay Income Tax?
A. Yes - 29% From one dollar, but only after all tax deductions have been applied.
GO TO TOP
Q16. What Are Property Tax Allowances?
A. Property tax allowances are a valuable aspect of any property investment due to their ability to enhance an investor's return and produce a better cash flow.
However, a high level of expertise is required to ensure that investors obtain maximum allowable entitlements. Property tax allowances form part of the Income Tax Assessment Act 1997 (ITAA 1997) and provide an opportunity for owners of income producing property to reduce their assessable income. There are a number of property tax allowances available to property owners, investors, and developers, including allowances for building structure and depreciation on plant.
Property tax allowances are often simply referred to as tax depreciation.
Q17. Do I really need an accountant?
A. It's so important to have the right accountant. It's best if they understand property investment and everything involved with it plus own property themselves. If your accountant can only talk about inflation and the state of the economy - give them a big miss.
Accountants are there to account to the Government regarding your business affairs.
Many do not minimize tax, or have the required resources or attitude to advise on finance, properties, depreciation, structures and many other points. Most do not have the time.
They can help you greatly if you tell them what your plans is as most accountant's work on the past, not the future. Specialist accountants are worth their weight in gold. The best person to ask advice from is the one in the mirror you see every morning.
Q18. How do I find and accountant, and how will I know if they are the right one?
A. We can refer an accountant that is suitable for you; Please read the following and ask yourself: Does or can your accountant do the following for you? If they don't, you may wish to contact specialist accountants we know who can.
Services
- Financial Reconstruction
- Debt Reduction
- Corporate Structures
- Tax Planning
- Risk Management
- Retirement Security
Identify Potential Savings
- Interest
- Debt Period
- Cash Flow
- Tax
Financial Diagnostic Systems
- Ratio Analysis
- Balance Sheet Analysis
- Profit and Loss Analysis
- Cash Flow Forecasting
Areas of Diagnosis
- Finance Restructuring
- Debt Reduction
- Corporate Structures
- Tax Planning
- Risk Management
- Remuneration Strategies
- Investment Leveraging
- Retirement Planning
Q19. How much do they charge?
A. This will vary on amount work required - on average $300 per year.
GO TO TOP
Q20. What expenses are tax deductible to minimise tax on income I receive?
A. All expenses - excluding stamp duty. This is the same as for an Australian citizen.
Finance
Q21. How much deposit do I need?
A. Generally 30%, but once you own property in Australia, your equity in your properties can be utilised to buy without a deposit plus all purchasing fees.
Q22. How long are they tax deductible for?
A. Prime cost on building construction cost is 2.5% for 40 years or 4% on some unit buildings if comply. Fixtures and fittings etc are on diminishing value method.
Q23. How do I arrange Finance?
A. We utilise specialist finance groups who have many loan products to offer through banks and other lending institutions. Access to the right loans is vital. Their service is excellent and they will save you many hours of going around all the banks including your own and taking out the wrong loan offered or sold to you.
Q24. When should I arrange Finance?
A. Finance should be the first thing arranged before anything else. Then the remaining of the transaction runs smoothly. There are very special loans for mortgage elimination and true revolving lines of credit. These need to be administered and are very effective if done correctly.
GO TO TOP
Q25. How much do most financial institutions charge?
A. Generally 30%, but once you own property in Australia, your equity in your properties can be utilised to buy without a deposit plus all purchasing fees. What is most important is they are able to successfully complete your application on the best terms available with the correct loan for you. Charges for loan set-up costs are tax deductible and are added to your buying costs so you never pay anything out of your pocket.
Law
Q26. When I purchased an investment property in Queensland, do I need a Queensland Solicitor?
A.) Yes, if you do not know a Queensland solicitor, we can recommend solicitors who are experienced in dealing with investors and also financial groups, ensuring smooth and easy transactions. For overseas buyers with FIRB (Foreign Investment Review Board) requirements, you can be assured these solicitors are also experts in dealing with your situation.
Q27. What happens to my deposit money, and other fees once paid?
A.) All deposit monies paid under the Contract of Sale including costs for searches, registration of title, stamp duty, body corporate, rates adjustments and their professional fees until settlement are held in a Lawyer's Trust Account. No monies are released or paid to the Seller/Developer during construction. For long term off the plan projects it is common provision in the Contact of Sale to provide for the investment of the deposit monies.
Q28. Who keeps the interest earned on my deposit money?
A.) Whether the interest received on the investment or the deposit monies is to be received wholly by the Buyer or shared equally with the Seller/Developer will depend upon the specific terms and conditions of the relevant Contact of Sale.
Q29. Am I entitled to a cooling off period, if so for how long?
A.) Yes, the Queensland Government provides all Buyers of residential property in Queensland with a compulsory five business day cooling-off period. During this period the Buyer is fully legally entitled to cancel the Contract of Sale for no other reason than the mare fact that he has changed his mind.
Q30. When does the cooling off period start?
A.) The cooling-off period commences the day the Contact is signed by the Seller/Developer and received
GO TO TOP