The UK government has announced an additional 2% surcharge on all non-resident buyers of property in England and Northern Ireland, prompting a potential scramble from foreign investors before its enforcement on 1 April 2021.
The new increase in stamp duty, to be paid by individuals and companies not paying tax in the UK, will be rolled out after a consultation.
The new levy, once effective, is in addition to the stamp duty surcharge introduced in April 2016 on second homes.
UK STAMP DUTY FOR INDIVIDUALS OWNING MULTIPLE HOUSES
Amid criticism that the Government’s efforts to tackle the housing crisis has been a flop, Mrs May’s latest measure intends to bring down property prices for British residents by deterring foreign buyers.
Mrs May said on the BBC that her party is “very concerned about the impact that foreign buyers have on the housing market and the impact they have on people who are living here and trying to get into the housing market. The evidence is that foreign buyers coming in pushes house prices up and lowers home ownership here.”
However, the move could be counterproductive, as reduced foreign investment could set back house-building efforts. Builders sell off-plan property in order to seek better financing terms, and the lack of foreign cash injections could slow down projects in the pipeline.
Virata Thaivasigamony, CSIPROP’s Director of Research feels that this would be a stopgap measure with potentially no real long term solution for housing supply in the UK.
“Price growth is influenced by supply and demand. There is already a glaring shortage of housing in the UK, which is a driving factor in house price inflation. Existing homeowners are facing challenges in downsizing or upgrading their homes, while millenials are unable to afford their own homes, hence the need for buy-to-let property.
“This new measure could be good in the short term for local buyers. However, foreign property investors have helped increase the supply of housing in the UK, and deterring foreign investment will have a knock-on effect on housing supply,” he said.
Trevor Abrahmsohn of estate agents Glentree International says, “whilst it is a laudable aim to raise a few hundred million pounds for homeless people, at this critical time for the country, when you want to encourage inward investment why stick up a notice to foreign investors saying ‘we’re closed for your business’?”
Adam Challis, head of residential research at property agents JLL, said: “It’s another small change but if it is read by investors as a signal of something broader, it’s quite possible that it will have a material effect on supply.”
Recent research has indicated that England has a severe backlog of 4 million homes. The Government will need to build 340,000 homes per year until 2031 in order to address the backlog. Current building efforts have fallen short — in 2016/17 only 217,350 homes were built and the government’s current pledge to build 300,000 homes annually by the mid-2020s, will not fully address the shortfall.
Thus, any slowdown in housebuilding could further push property prices, having the opposite effect of what Mrs May intends.
“If you’ve been sitting on the fence about investing in UK property, now is your best chance before the surcharge gets implemented. We are talking substantial savings,” Virata advised, adding that he foresees increased investment activity in the near future as foreign buyers attempt to beat the surcharge increase.
The increased duty will raise £40m to £170m a year, against the existing £9.5bn for residential property. Mrs May said this would be spent helping rough sleepers, whose numbers have been rising.
In August the government launched a £100m drive to eradicate rough sleeping in England by 2027.
If you’ve been sitting on the fence about investing in UK property, don’t hesitate any longer. Learn more about the savings that you get from buying before the stamp duty surcharge: give us a call at (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at info@csiprop.com!
By Ian Choong Edits & additions by Vivienne Pal
Sources:
You’ve decided on an Australia property investment but have no idea what the purchase process entails. This article will guide you through some of the stages in the investment process.
It starts with choosing a property that fits your budget and investment goals, and appointing an agency that can take you through the purchase process — unless you prefer the hassle of flying to and from Australia and dealing with the developer/seller directly! It is important that your agent works closely with the developers, facilitating communication from the developer to you, and vice versa.
At CSI Prop, we recommend investments based on your goals and budget. Once you have decided on the property for investment, you will need to sign Reservation Forms and a Solicitor Appointment Letter.
There are several payments required at this stage:
*Payment can vary depending on project/developer/solicitor
CSI Prop works closely with a panel of solicitors and mortgage brokers who are recognised in Australia. We’re happy to recommend our panel, but you also may use solicitors or mortgage brokers of your own choosing.
Subsequently, you will sign the Contract of Sale for the property, and make your first payment to the developer. For apartments, this is 10% of the property price. For a land and house package, the first payment will be 10% of the land price and 5% of the building price.
You will also need to make an application with the Foreign Investment Review Board (FIRB). This process is required of non-resident foreigners before purchasing any residential property in Australia. The cost for this (as of 2018-19) is A$5,600 for dwellings valued at A$1 million or less.
Application for financing can be done 3 to 6 months before settlement, and the banks will assess your financing position and eligibility.
Documents typically required by the bank include:
There are typically no application and processing fees to finance your property. However, the bank legal fees can incur up to 1.5% of the value of your property. There are several banks in Malaysia and internationally that offer financing, please get in touch with us to find out more.
Once your property achieves completion, the developer will send a Completion Notice to your solicitors. You will need to make full payment for the property at this stage, which is also known as the final settlement.
At this point, you will also need to pay stamp duty, also known as land transfer duty, to the State Government. Stamp duties differ in amount across the different states of Australia, and the following rates covered here are applicable to residential property only. Different rates may apply to commercial property.
Victoria (Melbourne)
The following stamp duty rates apply in the state of Victoria for property that is not the buyer’s principal place of residence:
Foreign property buyers pay an additional 8% duty on top of these normal rates (stamp duty surcharge), unless exemptions apply. There are exemptions for Australian-based corporations or trusts which add to the supply of housing stock in Victoria.
In Victoria, Australian citizens, permanent residents or New Zealand citizens with a special category visa have the following exemptions:
Western Australia (Perth)
These are the stamp duty rates for property in Western Australia:
Foreign property buyers pay an additional stamp duty surcharge of 7% in Western Australia.
Australian Capital Territory (Canberra)
These are the stamp duty rates in Australian Capital Territory:
Foreign property buyers pay an additional stamp duty surcharge of 0.75% in the ACT.
New South Wales (Sydney)
These are the stamp duty rates for property in New South Wales:
Foreign property buyers pay an additional stamp duty surcharge of 8% in New South Wales.
Queensland (Brisbane)
These are the stamp duty rates for property in Queensland:
Foreign property buyers pay an additional stamp duty surcharge of 7% in Queensland.
When you exchanged contracts with the developer you may have signed an agreement to hire a letting agent. You may also have chosen to manage the property yourself.
The letting agent will ensure your property is well-maintained, taking care of all expenses involved, and collecting the rental on your behalf.
When you receive your rental income, you will need to pay income tax to the Australian Government. Different income tax rates apply for Australian residents and non-residents.
You may also be taxed again on your Australia income by the country where you’re resident in.
Malaysians do not need to pay taxes on rental income from Australia, to the Malaysian Government due to the double taxation agreement that both countries have. If you live in another country, you will need to find out if there is such an agreement between your country and Australia.
Income Tax for Non-residents in Australia
Taxes need to be filed yearly. You can file your taxes yourself, or hire a tax agency to do it for you. CSI Prop can recommend a qualified professional in Australia to manage your taxes.
Note that if you own a residential property in Victoria that remains unoccupied, you may be liable for Vacant Residential Property Tax (VRPT). The tax was introduced as a measure to increase available rental properties, and is at a rate of 1% of the Capital Improved Value (CIV).
Should you choose to sell off your property, we can recommend a property agent and solicitor to assist you.
The agent’s commission rates, your advertising budget, and exclusivity will be decided by you and the agent. The agent will provide an appraisal of the property indicating how much they expect to sell the property for, and tell you how they plan to market your property. Agents fees vary according to state.
Legal fees generally range between A$700 and A$1300.
Take note that, unlike stocks, property is not a liquid asset, and you should always expect that it will take some time for the property to be sold.
Capital Gains Tax (CGT)
In Australia, capital gains are treated the same as income from other sources. Any net capital gain from the sale of a property is included as part of the seller’s income and taxed together with their other income. Capital losses can be offset against capital gains. Residents qualify for a 50% Capital Gains Tax discount, as long as they have held the asset for at least 12 months before disposal.
Click here for more guides on property investment, and please subscribe to our website notifications to get the latest updates! Leave us a comment below if you have any thoughts or questions on our article.
If you are interested to explore investing in Australian property for high returns, or if you need us to refer you to a good tax firm in Australia, don’t hesitate to give us a call at (65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at info@csiprop.com!
Disclaimer: This guide is an outline of CSI Prop’s purchase process, which may differ from other consultancies. CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review. You should also seek advice based on your particular circumstances from independent advisors and planners.
By Ian Choong Edited by Vivienne Pal
Sources:
https://www.sro.vic.gov.au/node/1485
The abolishment of the stamp duty for property up to £300,000 in the recently announced UK Budget will largely benefit first-time house buyers as well as investors/ current owners.
The UK Budget, announced just a few days ago, was billed the ‘Housing Budget’, with housing placed at the heart of the British government’s spending plans.
Chancellor Philip Hammond announced that more money will be poured into housing over the next five years to ensure that land is available, that homes, including affordable homes, and supporting infrastructure will be built where needed.
But the real headline-grabber was the abolishment of the Stamp Duty and Land Tax for first-time buyers, which is effective immediately.
Stamp duty and land tax is a lump sum payment imposed on purchases of property or land over £125,000. The tax rate varies depending on the value of the property.
The new Budget stipulates that stamp duty will not be imposed on purchases of property priced up to £300,000 outside London. Meanwhile, in high priced areas like London, exemptions will be availablle on the first £300,000 of the purchase price of properties up to £500,000.
The Chancellor said that this is effectively a stamp duty cut for 95% of first time buyers and that going forward 80% of first time buyers will not pay the tax.
The Chancellor introduced the policy after it was revealed that the number of people under 45 who own their own home has fallen by 20% since the Tories took power seven years ago.
While the new policy will largely benefit first-time house buyers, investors will benefit, too, as demand will push up property prices, which, together with the inherent lack of supply, will continue to drive people to rent. This will keep the rental market strong.
“The abolishment of stamp duty for property under £300,000 will fuel a spike in the prices of homes within this range due to increased demand and a rush to buy currently available property within this price range,” says CSI Prop spokesperson Virata Thaivasigamony.
“It’s a double-edged sword and boils down to housing availability. The reality is that there is a housing undersupply in the UK with little likelihood that supply will increase in such a short period,” he adds, alluding to the Chancellor’s pledge to increase construction of new homes to 300,000 a year on average by the mid-2020s (up from 217,000 last year).
The secretary of state responsible for housing, Sajid Javid, has said that up to 300,000 additional homes must be built in England annually, up from about 150,000 in 2015 and a little more than 220,000 over the past year. Some industry players say this looks increasingly unlikely given the significant national deficit and ongoing debates over green belt construction.
The Office for Budget Responsibility said that the tax break could push property prices up by approximately 0.3%, with most of the increase coming in 2018. It also said that it is the current property owners who would be the main gainers of the new policy.
HMRC has also confirmed in a statement that while the new stamp duty policy reduces the upfront cost of buying a home for first time buyers, it is also expected to lead to an increase in house prices in the first year after implementation.
Meanwhile, with the increase in prices and undersupply in housing comes a continued demand for the private rented sector. The Property Wire quotes Andrew Turner, chief executive of brokerage Commercial Trust Limited, as saying that there could be a higher demand for private sector homes in Birmingham, Manchester and Liverpool where landlords are already enjoying higher yields than in London.
The Royal Institute of Chartered Surveyors (RICS) has predicted that 1.8 million more households would be looking to rent by 2025 as a result of increasingly unaffordable homes.
Dorian Gonsalves, chief executive officer of franchise lettings agency Belvoir, pointed out that demand for rental properties is set to remain high.
He pointed out that many young people are actively choosing to rent rather than to become first time buyers and that is not necessarily going to change.
‘The reasons for renting are numerous, and many young people simply do not want the commitment of a 25 year loan,’ said Gonsalves.
What was rather unexpected in the Autumn Budget was the announcement that capital gains tax (CGT) will be imposed on all real estate types, to be effective likely by April 2019. Currently, CGT is only imposed on residential property.
This, however, is unlikely to affect investor appetite much, as many other jurisdictions already impose CGT on foreign property investors. Additionally, the robustness, transparency and resilience of the UK property market — on top of the weakened pound — continue to remain top criteria for foreign investors.
The Autumn Budget has also given local councils the authority to double taxes on empty properties. Under the new rules, local councils can charge up to an extra 100% of council tax if a home has been empty for two years or more, up from the current 50%.
Looking for projects below the £300,000 and £500,000 (London) range? Contact us at 03-2162 2260.
Article by Vivienne Pal
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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts.
Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.
Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260
Stamp duty will be increasing in Melbourne again. This increase is caused by the removal of the off-plan stamp duty concession on Melbourne property, which will affect all buyers. THIS WEEK COULD PROVE THE LAST CHANCE FOR YOU TO SAVE ~$A20K in stamp duty on Melbourne property.
WANT TO KNOW MORE ABOUT THE STAMP DUTY INCREASE? WATCH THIS VIDEO:
This video follows articles that we had written and published on our website previously regarding this change from as far back as 2 months ago.
To read our article on the new stamp duty increase, please click HERE.
To read about Vacant Residential Property Tax (VRPT), please click HERE.
These articles and video are our way of sharing knowledge with our clients and friends.
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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts.
Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.
Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260
Government measures for affordable housing at expense of foreign investors:
(i) Vacant Residential Property Tax (VRPT)
(ii) New residential developments restricted to only 50% foreign buyers
Last month we published an article announcing the latest raft of changes by the government to scrap off-the-plan stamp duty concessions in order to waive stamp duties for first-time buyers of houses worth up to $600,000 in Melbourne. (Click HERE to access the article).
More restrictions are in store for foreign investors. The Victoria government has also now effected a vacancy tax (Vacant Residential Property Tax or VRPT) which will will cost foreign buyers who don’t have a tenant in their property (or live in it themselves) for more than 6 months in a year, an annual penalty of 1% of the property’s capital-improved value. This means investors with a home worth $500,000 will pay $5,000 in tax if they don’t rent the place out.
The tax takes effect on 1 January 2018 and will target homes around inner and middle suburbs of Melbourne. This would include the following local council areas: Banyule, Bayside, Boroondara, Darebin, Glen Eira, Hobsons Bay, Manningham, Maribyrnong, Melbourne, Monash, Moonee Valley, Moreland, Port Phillip, Stonnington, Whitehorse and Yarra.
At press time, it is still unknown how the new tax will be applied or policed, but a on the State Revenue Office (SRO) of Victoria website states that the tax will be self-reporting, i.e, owners of vacant residential property will be required to notify the SRO of any vacant properties they own.
Meanwhile, moving forward, developers can only sell 50% of properties in new developments to foreign buyers. This means that at least 50% of new homes will be sold locally.
The suite of changes introduced by the government has drawn mixed reactions from the public and industry players. Some agree that it is a great move towards housing affordability, but there are parties — including from within the party — that have criticised this move.
What’s clear is that while this is a populist move that brings in the votes, it is a temporary measure that could cause the property market to remain on the boil.
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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts.
Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.
Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260
Investors should get into the Melbourne property market NOW and exchange by 30 June 2017 to avoid hefty stamp duty charges, which could cost some $15K to $20K* more than current rates. From 1 July 2017, investors of Melbourne property are no longer eligible for stamp duty concessions, resulting in payment of tens of thousands of dollars more. Note: Victoria is the only state in Australia that has stamp duty concessions.
The increase in stamp duty charges are due to the Victoria government’s changes to the First Home Owner Grant and new stamp duty exemptions and reductions for first home buyers (i.e, concessions have been removed to fund these reductions and exemptions). First home buyers in this case refers to local Australians or foreigners with PR who are purchasing a property for the first time with the intent of occupation.
Effective 1 July 2017, off-the-plan stamp duty concessions will only be available for people who intend to live in the property. First home buyers no longer need to pay stamp duty on properties valued under $600K, while discounts are available on a sliding scale for purchases between $600K – $750K.
Impact of new stamp duty on investors
The new laws will impact borrowing capacity as investors will need to include the new stamp duty into their calculations. We advise that you speak to a mortgage broker to understand its full implications.
How does stamp duty currently work?
Victoria has the highest stamp duty rates in all Australia. However, unlike other states, Victoria stamp duty is split into land and construction.
Investors/owners of completed properties pay FULL stamp duty, fulfilling both the land and construction components.
Investors/owners of off-the-plan property that has yet to commence need only pay stamp duty on the land component.
Investors/owners of off-the-plan property that has begun construction will need to pay duty on the land component plus a tiered payment for the construction component depending on how far along construction has taken place.
Example:
Your apartment is valued at $500,000 and its land is valued at $100,000
| PROGRESS | OFF-THE-PLAN | CONSTRUCTION BEGUN | COMPLETED PROPERTY |
| PAYMENT DUE | $2,150 | $2,150 + tiered amount | $25,070 |
AVOID FULL STAMP DUTY COSTS OF $15K – $20k* – INVEST IN MELBOURNE NOW AND EXCHANGE BY 30 JUNE 2017.
*The $15K-$20K estimation is benchmarked on a 1-bedroom property priced at $400K-$500K. A 2-bedroom property priced at $1million or more will cost higher stamp duty charges
CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts.
Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.
Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260
Source: http://bit.ly/2prHWAb or http://bit.ly/2p405Y7
Very recently, the Victorian government announced the abolishment of the controversial stamp duty for first-time homebuyers. This ‘lifeline’ to young people struggling to get on the property ladder takes effect from July 2017 and is applicable for any homebuyer in Victoria whose property costs less than AUD$600K.
In a market where experts and market watchers are spouting concern over housing undersupply and skyrocketing house prices, this could well be ‘the road to hell being paved by good intentions’.
Why?
Because simple economics tells us that cheaper property prices (in the form of the abolished stamp duty in this case) will stimulate demand. And increased demand in an overheated market will push prices higher in that price range. Even Federal Treasurer Scott Morrison has shared his reservations, which you can read here.
Compounding this is the low interest rates (the central bank slashed rates twice last year) which contributed to the boom in house prices, particularly in Melbourne and Sydney. Experts argue that to put a dent in the housing market, the RBA would need to raise interest rates, which is unlikely due to concerns about inflation and the risk that it would impact the economy significantly.
Sharp increases in interest rates may not be the wisest thing to do because it will affect growth and if anything, the RBA would likely increase rates on a gradual basis.
Which is why it may be some time yet before the prices of property will collapse as interest rates would have to rise to a certain level before the property bubble will pop. An article in The Daily Reckoning reports that when the US housing market blew up in 2007/2008n, it was the result of the Federal Reserve raising rates 17 times (25 basis points each time) from 2004 to 2006.
So it seems most likely that the housing market may well bubble merrily away…and house prices in Melbourne at the very least will continue going higher for some time to come.
Read more at http://bit.ly/2m6wLL1
CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts.
Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.
Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260
TICK TOCK.
The clock is ticking. Come 1 July 2016, the 4% increase in stamp duty surcharge imposed by the Victoria state government on foreign property investors shall take effect. This increase, announced late April 2016, comes hard on the heels of the 3% stamp duty surcharge introduced on 1 July last year.
Victoria’s new stamp duty for foreign buyers of residential property is similar to changes adopted by the governments of Hong Kong, Singapore (and Malaysia), which charge an additional 15% stamp duty over and above the amount paid by domestic buyers.
Below is a FAQ detailing what the increase in stamp duty surcharge means for the foreign investor, and the implications to housing and investment into Victoria moving forward.
What is the new stamp duty rate imposed on foreign purchasers on 1 July 2016?
On 1 July 2016, foreigners will have to pay a stamp duty of 7% on purchases of houses, apartments and vacant residential zoned land in Melbourne and across Victoria. This is a 4% increase from the stamp duty surcharge introduced barely a year ago.
When does it take effect?
The new stamp duty surcharge applies to contracts signed on or after 1 July 2016.
Why is there a hike in stamp duty surcharge?
The Andrews Labour Government is taking action to ensure foreign buyers of residential property — who do not pay payroll tax and GST — contribute their fair share to the liveability of the state, and maintenance and development of government services. We believe that this new and rather sudden increment could be politically motivated: a federal election to determine all 226 members of the 45th Parliament of Australia will take place on Saturday, 2 July 2016 (one day after new stamp duty rate taks effect) after an eight-week official campaign period. This is Australia’s first double dissolution since the 1987 election. Yup, the stakes are high and this is a big deal, politically.
Statistics show that Victoria will have the largest population in Australia in the future, driven by massive and rapid growth in Melbourne city (source: CBRE). The Australia Bureau of Statistics projects that Melbourne will overtake Sydney as Australia’s biggest city in 2053. An increased population will lead to continual sprawl in the city and drive the demand for housing. And as migrants continue to move into Melbourne, there will be a greater need for rental accommodation.
With this increased surcharge, the Victorian government expects to raise $486 million over the next four years.
Are there any exclusions?
Yes; permanent Australian residents and New Zealanders will be excluded from the surcharge.
How does this affect the foreign investor and how should you take advantage of the situation in the short term?
(i) Save RM50K++ in duties*
Foreign investors are rushing to lock in their investments before the increased surcharge takes place. Timing is crucial and the window leading up to the surcharge increase, is small. If you have been thinking of investing in Melbourne property, now is a good time o decide. Acting quickly could save you more than RM50K++ in duties and ensure that you snap an investment in a good location.
For example, you could save approximately RM50K in stamp duties on a property worth $400K and about RM100K for a property worth $800K.
*dependent on price of property
(ii) Wise decisions go a long way
You should not invest for the sake of it or if you are not ready. We are strong advocates of making informed decisions: a thriving locality with potential for job growth, a growing economy, good amenities and increased infrastructure are key to a good investment. The best areas for investment and living in Melbourne are within the fringe of the CBD (click here to find out why). These include areas like Brunswick, North Melbourne, St Kilda and South Yarra, as well as landed housing across Melbourne, as they fetch better rental, capital appreciation and have higher chance of resale to Australians (by law, foreigners are only allowed to purchase brand new property. As such foreign investors can only dispose of their property to Australians who generally prefer to live outside the CBD).
What happens if you do not buy now?
You will merely have to purchase at a higher price, which means your rental return will be diminished. We stand by our advice to not be hasty, but to make informed decisions.
What are the ramifications of the stamp duty hike on foreign investment?
We foresee a slowdown in investments into Victoria and Melbourne in the short term. This could translate to a slowdown in construction of new builds, thus affecting supply of housing. This also means that Melbourne will become a more expensive city to invest in than Sydney, which is starting to see a comeback in investment. However, with the impending growth and changes in Melbourne, we feel that foreign investments into Victorian property will continue unimpeded in the long run.
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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts.
Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.
Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260