Our Property E-team member from our Sydney E-Team , Propertybuyer, was named as the Buyers’ Agency of the Year 2020 in this year’s REINSW Awards for Excellence.
“We are very proud to have won this award,” stated Rich Harvey, CEO & Founder of Propertybuyer.
Propertybuyer stood out among this year’s finalists as a provider to best represent property investors in purchasing residential and commercial real estate.
“Buyers’ Agents are rapidly growing in popularity as more buyers realise the benefits of independent and professional representation,” Rich said.
Alongside the Buyers’ Agency of the Year category, Propertybuyer was also a finalist for the Operational Support of the Year 2020.
Having a buyer’s agent on your side who can guide you throughout the entire buying process is what Propertybuyer does best. They offer quality advice on a property purchase to a range of clients including professional executives, first time home buyers, experienced investors, commercial buyers or even developers.
“It gives our clients the reassurance that they are making the right choice when looking for a property,” commented Rich.
Clients have praised Propertybuyer for the work they do and the services they offer. Buyers have commended how Rich and his team have helped them with their best interest at heart and their genuine interest in finding the most suitable property.
The global pandemic has affected workers from all over the world. Australia, like other nations, have implemented strict regulations on the travel of foreign nationals into their country.
Exemptions on Australia’s Travel Ban
In the latest amendment in Australia’s travel ban, the Border Force Commissioner has been given authority to approve travel in compelling and compassionate situations.
If your work involves critical infrastructure projects, and health and essential services, then there is a chance that you would be approved to travel to Australia.
If you have a split family or if you’re a temporary visa holder with a prior established residence in Australia and was caught offshore by the travel restrictions You may be included in the travel ban exemptions.
The list of exemptions has been gradually expanded since the initial lockdown in March. The current list of exemptions includes:
- travelling at the invitation of the Australian Government or a state or territory government authority for the purpose of assisting in the COVID-19 response
- providing critical or specialist medical services, including air ambulance, medical evacuations, and delivering critical medical supplies
- person with critical skills or working in a critical sector in Australia
- person sponsored by an employer to work in Australia in an occupation on the Priority Migration Skilled Occupation List (PMSOL).
- entry would otherwise be in the national interest, supported by the Australian Government or a state or territory government authority
- military personnel, including those who form part of the Status of Forces Agreement, Commonwealth Armed Forces, Asia Pacific Forces and Status of Armed Forces Agreement
- a student completing year 11 and 12, with support from the relevant Australian State or Territory government health authority and education department
- travelling for compassionate and compelling reasons.
Priority Migration Skilled Occupation List
The Priority Migration Skilled Occupation List categorizes the 17 occupations that provide the critical skills needed to help the recovery of Australia’s economy from the COVID-19 impact. Here are the occupations included in the PMSOL list:
- Chief Executive or Managing Director
- Construction Project Manager
- Mechanical Engineer
- General Practitioner
- Resident Medical Officer
- Medical Practitioner nec
- Registered Nurse
- Developer Programmer
- Software Engineer
- Maintenance Planner
Visa applications for other occupations will still be processed but those that fall under the PMSOL list will be given priority. Under continuous monitoring of the labour market and the development of required skill to recover from the COVID-19 impact, the Government and National Skills Commission may change and update the list.
What is a critical skill?
If your skillset covers the following, then it is considered as a critical skill:
- travelling at the invitation of the Australian Government or a state or territory government authority for the purpose of assisting in the COVID-19 response
- providing critical or specialist medical services, including air ambulance, medical evacuations, and delivering critical medical supplies
- with critical skills required to maintain the supply of essential goods and services (such as in medical technology, critical infrastructure, telecommunications, engineering and mining, supply chain logistics, aged care, agriculture, primary industry, food production, and the maritime industry)
- delivering services in sectors critical to Australia’s economic recovery (such as financial technology, large scale manufacturing, film, media and television production and emerging technology), where no Australian worker is available
- providing critical skills in religious or theology fields
- sponsored by your employer to work in Australia in an occupation on the PMSOL
- whose entry would otherwise be in Australia’s national interest, supported by the Australian Government or a state or territory government authority.
You can request for an exemption through the Commissioner’s Discretion – your request must be accompanied by the following:
- Passenger details: name, DOB, visa type and number, passport number, Australian residential address, Australian telephone number)
- Case information: why this case should be considered for Commissioner discretion/exemption
- Supporting statement: the request should be accompanied by a statement and evidence of how you meet one of the grounds for an exemption or excise of the Commissioner’s discretion listed above.
One important thing that you should take note of is that all travellers are required to provide evidence to immigration that you meet one of the exemptions mentioned before travelling.
How businesses are affected by the travel ban
If you are running a business in Australia and want to employ an expat, they must have a valid Australian visa and an approved waiver of the travel ban. But there is no guarantee that the application to travel will be approved as the decision is subjective and there are approximately 20,000-25,000 applications each week. The chances of approval are very minimal so it is advisable to seek out a person who can work remotely rather than having to apply to travel to Australia.
Earlier this month, Westpac, St George, and Macquarie banks reduced the serviceability floor rate for home loans from 5.35% p.a. to 5.05% p.a., meaning an increase of borrowing capacity and an opportunity for expat investors and home buyers.
The decrease to serviceability floor rates comes off the back of announcements made by Philip Lowe of the Royal Bank of Australia (RBA) in May this year and an ongoing trend toward reduction amid growing recession and pandemic woes.
In Gareth Hutchens’ article, published on 28 May, by ABC news online, Lowe claimed that interest rates would likely remain at 0.25 percent for years – until the unemployment rate was back to around 4.5 percent.
‘We’re not going to be raising interest rates until full employment is in, and we’re sustainably within the 2-3 percent target range for inflation,’ he said. ‘I think it’s reasonable to expect that that will not be for some years.’
By dropping their floor rate to 5.05%, the Westpac group reflects the low rate environment we are currently in and proves to customers that they want their business, so they borrow more.
Thus, the other big banks will likely follow this trend (Westpac’s new 5.05% rate comes in below ANZ’s 5.25%, CBA’s 5.40%, and NAB’s 5.50%), and if they do, borderline customers across major lenders will have more chance of loan approval and help the economic downturn shift back.
What this means for expat investors
Reductions to rates are good for Australian-based home buyers but are even better for international purchases and the expat community.
When you apply for a home loan, the lender assesses all your loans, new and existing, at rates much higher than the actual rate you pay. Government regulator, Australian Prudential Regulation Authority (APRA), requires banks to ensure their customers can repay loans at 2.5% more than current interest rates, or the ‘floor’ rate set by the bank, whichever is higher. They call this the earthquake test, and it is there to ensure that if interest rates rise, you can still service your loans.
Over the last few years, interest rates have decreased, but the serviceability floor rate had not moved. Given the pandemic and unexpected recession-era we are now facing, rates will not increase soon. The government wants people to borrow money to buy properties and help prop up the economy. Last year, floor rates dropped to 7%, meaning customers could borrow more based on cashflow and mortgage repayments; however, they couldn’t borrow more money on paper even though their real-life affordability had improved.
Because expats have additional borrowing capacity restrictions, banks will assess 60% to 80% of actual income to account for foreign exchange risk. The benefits of investing now in a recession-like market are paramount, as the decrease to 5.05% means for some Australian expats (permanent residents living overseas), the borrowing capacity increases by up to 15-20%.
And if you are only borrowing 60% of the property value, some banks will give you a very low-interest rate; for example, Macquarie Bank’s current variable investor rate is 2.69% p.a.
While we expect this trend to last some time, the rate reduction is excellent news for Australians living overseas who’d like to invest now. As the Expatland mortgage partner, Stoneturn is well placed to assist you with enquiries about the changes.
If you are an Australian expat who would like to review a current loan or explore new mortgage options, please get in touch with Stoneturn today.
The proposed removal of the main residence exemption on capital gains tax (CGT) for non-residents was met with criticism when it was first introduced in 2017. Although the Bill lapsed, a recent reworking was brought back on October 23rd, 2019.
So, what’s new? More importantly, what does this mean for Australian expats who still own a former main residence?
Changes with the main residence exemption for non-residents
As a revisal of the original Bill, this new proposed measure delays the inevitable loss of the CGT exemption. Two primary changes have been introduced. The first is simply an extension of the transitional concessions.
This concession applies for expats who owned a primary residence on May 9th, 2017. Existing Australian expats now have until June 30th,2020, to sell their main residence under the existing rules. (Previously they had until June 30th, 2019).
The new Bill also introduced some exceptions whereby a non-resident may be able to access the main residence exemption. These exceptions apply in the event of death, terminal medical conditions, or divorce. However, these events must occur within 6 years of becoming a non-resident. This ensures that the 6-year absence rule can still be accessed by expats who face such unexpected life events.
Retrospective application means there will be no expat CGT main residence exemption for any foreign resident.
It’s not all that often that major tax changes are applied retroactively. In this case, it does. Anyone who purchased their primary residence before a hint of these changes existed will still be caught by them.
Were you a foreign resident with a main residence property held on May 9th, 2017? The main residence exemption will only apply for non-residents if you sell prior to June 30th, 2020. Of course, you still need to meet the usual requirements for main residence CGT exemptions. If you wait, then you’ll miss out. You won’t even be able to apply for a partial main residence exemption.
No relief for long-term main residence
Imagine this scenario.
You purchase and live in a home from 1989 through to 2019. You’re then given the opportunity of a lifetime and make a permanent move overseas. You put your home up for sale immediately. However, by the time your property sells, you are a non-resident for Australian tax purposes. This means you are hit with a CGT bill on the capital gain. It doesn’t matter how long you previously lived in the property. You don’t qualify for any exemption. On top of this, you’re missing out on potential capital gains reductions. That’s because you didn’t think it was necessary to keep the relevant records for the 20 years that you lived in the property.
Anyone who purchased their main residence after May 9th, 2017 will be caught under the new laws when they sell as a non-resident. Whether they sell now or next year, they will be subject to the full CGT.
Time To Act
While the Bill hasn’t passed into law yet, it is important to strategise. Be prepared for what it may mean for your situation and plans so that you have your contingencies ready and, if necessary, put any immediate plans into action. While CST Tax Advisors and other accounting bodies will continue to address the concerns with this measure, it’s important that you understand how these measures could impact you.
Contact CST Tax Advisors to discuss your current situation and assess your options.
With the Coalition’s victory in May 2019 Federal elections, the immigration system is expected to continue the past six years trends. Prior to the election, Prime Minister Scott Morrison announced a cap of 160,000 migrants per year for the next 3 years.
Out of this number 30% will be allocated to the Family migration while the remaining 70% will be dedicated to the Skilled migration stream.
Out of the latter category, 39,000 visas in 2019-20 will be allocated to Employer Sponsored skilled visas, which shows an increase of almost 3, 500 places. However, the Government introduced stricter labour market testing, so that skilled migration is only used where an Australian worker is not available and stronger English language, age and work experience requirements are required.
Introduction of two new regional visa categories
Within the Employer Sponsored skilled visa scheme, a particular focus will be on the regional areas. The Government will introduce two new regional visa categories (Subclass 491 Skilled Work Regional (Provisional) visa and Subclass 494 Skilled Employer Sponsored) in November 2019.
Under these two schemes, skilled migrants will be priority processed and afforded access to a larger pool of jobs on the eligible occupation lists compared to those who live in the major cities. Also, skilled migrants will have a pathway to permanent residence under the Subclass 191 Permanent Residence (Skilled Regional).
Skilled Work Regional Scheme
This regional scheme will be reinforced by the Designated Area Migration Agreements (DAMA), which target specific skilled migrants to work in the regional areas of need.
With the DAMAs, the Federal government this year is aiming to provide more attractive incentives to the new settlers in Australia to avoid the big cities and settle in the areas that are not so populated and still requires the new migrants’ skills and expertise.
For this purpose, they have allocated a number of places, to encourage the new migrants to settle in the Northern Territory, the Great South Coast of Victoria, the Orana region in New South Wales, South Australia and Kalgoorlie-Boulder in the Western Australia’s Goldfields.
What this means for you as an expat moving to Australia
Expats seeking to move to Australia now have a greater opportunity to apply for a visa under the two new regional visa categories as there is a larger pool of jobs on the eligible occupation lists .In addition, their visas will be processed more quicker than other applicants as they are afforded priority processing. Expats in Australia who hold these visas will also have a pathway to permanent residence under the Subclass 191 Permanent Residence (Skilled Regional) Visa.
The team at Migration World are ready to and can assist you with all your questions and enquiries regarding the granting of a visa to enter and live in Australia
The foreign exchange market is a global decentralized market also known as an over-the-counter market where bank dealers make the market to determine the interbank exchange rate, i.e. the rate the banks use when trading with one another.
The interbank rate is the mid-point between the buy and sell rate for a currency on the open market and is the most accurate rate of exchange at any given time. You can easily check this at any time using the XE Currency Converter.
Unfortunately for most of us, this rate is reserved solely for banks and large financial institutions trading in large amounts of foreign currency.
For retail or business banking customers looking to make smaller international money transfers, a margin (or spread) will be applied to the interbank rate to ensure a profit for the service making the transfer. As a retail banking customer, this margin may be anywhere between ~4-5% of the interbank rate.
The graph below illustrates the rate that a customer may expect to receive from the bank when converting their AUD or NZD to GBP.
What determines whether I receive a competitive rate?
Naturally, when sending money abroad, it’s in your best interests to ensure you keep as much of your money as possible by locking in a favorable rate of exchange.
The exchange rate you receive will be based on a number of factors, including:
- Volume – the amount you are converting
- Currencies exchanged
- Knowledge and awareness
- Frequency of transactions – ongoing or one-off
However, one of the most sure-fire ways to ensure you are receiving a competitive rate is to look at using a money transfer specialist like XE who provides a much sharper rate of exchange than you would otherwise receive from the banks.
Why you should look beyond your bank
XE works closely with our broad network of referring partners to provide their clients with a competitive, secure money transfer solution.
As such, when you choose XE Money Transfer via one of our partners, you will receive preferential rates of exchange that are more competitive than you would receive from other providers.
…It’s not just about the rate
At XE, we pride ourselves on delivering our clients value beyond a great rate, providing a much more comprehensive service than they could expect to receive from the banks.
Exchange rates fluctuate at any given minute and as such our expert team is on hand to be your eyes and ears in the market and advise on how to ensure you lock in the best rate possible.
We also offer a range of products typically not made available to retail banking clients, including Market Orders and Forward Contracts, that will help you reduce your exposure to currency risk.
Whatever your needs or situation, feel free to get in touch with the team at XE to discuss the best approach to your foreign currency needs.
There are many challenges with relocating, with some challenges rating higher on the stress scale than others. Once the logistics of the move are over and you are no longer stepping over boxes or searching for teaspoons, settling in is the next hurdle.
By settling we don’t just mean sorting out your new home, but how do you make your new environment ‘feel’ like home?
It can be daunting with family and friends no longer near at hand. The ‘euphoria’ of arriving safely with your belongings is quickly overtaken by the realization ‘that’s it, I’m here, what now?’
The settling in period can be quite different for those who have relocated for work and for those who have accompanied their partners. Your new work environment is your new routine and you tend to hit the ground running.
Many companies offer support and programs to assist with settling in. These are really worthwhile participating in, especially if language or cultural differences are a challenge with the new job.
Social or sports clubs attached to your company are a great way to meet people initially. Meeting up with people who have the same interests will broaden your social circle, while you slowly build your own network. If you have relocated overseas, seek out expat groups to join.
Expats have already done what you’re doing and can be a wealth of information and may even prevent you from making mistakes due to your inexperience. Remember this is not about trying to etch out a piece of home in a foreign land it’s about finding a support system to help, in what can be for some, a lonely settling in period.
Don’t neglect opportunities to form friendships within your local community too, it’s the best way to assimilate and feel part of your new environment. If on the other hand, you are relocating because of your spouse or partners job, it presents with its own kind of challenges.
You may not be able to work, due to visa restrictions, unrecognized qualifications or having young children. You may find yourself somewhat isolated, in the initial phase, while your partner’s days are full and busy with their new job.
You may be waiting for them to return home from work ready to hear all their news only to be met by an exhausted partner, whose day has been full of learning new systems, meeting new colleagues, navigating new roads or transport systems, and all in another language.
You, on the other hand, may not have spoken to another adult all day! It can put a strain on the relationship.
It’s important for both parties to see what challenges the other is facing. Good communication is key to understanding and acknowledging what the other is going through.
For it to be a success, both parties need to feel supported and listened to, while navigating their new life. It is not uncommon for a couple or family to return home because they were not prepared for the possible struggle of the early months.
It can be a painful learning curve to know that it needs to work for both, for it to work at all.
As an expatriate moving to Australia one of the important tax issues is how your salary would be taxed.
Australia does not have a separate salaries tax per se. Rather your employment income and all your other income such as investment income is added together and forms part of your assessable income in Australia.
Once you have calculated your assessable income you then need to work out your ‘allowable deductions’ before you arrive at your taxable income.
A number of items can be considered to be deductions against employment income but care needs to be taken to ensure the strict rules regarding employment-related deductions are complied with.
You pay tax based on your taxable income. The personal income tax rates which apply to you are published every year by the ATO. Australia’s current personal tax rates can be found here.
You will notice that the top tax rate in Australia is 45% and this rate applies once your income is more than $180,000 for the tax year. The income tax year commences on 1 July and ends on the 30 June year.
If you derive employment income then Australian tax law requires your employer to deduct what is known as PAYG (Pay as You Go) from your salary and you are paid a net amount after tax.
Your Australian employer is then required to pay the ATO (typically on a monthly basis) the amount of PAYG they withhold from your salary.
At the end of the year (30 June) your employer has to issue what is known as a PAYG Payment Summary which details the gross salary paid to you for the tax year, the amount of PAYG withheld and the net amount paid to you.
The information is automatically reported to the Australian Taxation Office and recorded against your Tax File Number.
If you are receiving allowances, such as car allowances or travel allowances, then these will also be summarised on the PAYG Payment Summary.
If you are moving to Australia and you commence your employment halfway through a tax year then typically your employer will still be required to deduct PAYG from your employment income as if you had been employed for a full year.
Because of the graduated tax rates, this would mean that typically unless you have other income to declare – such as investment income – you would receive a tax refund in your first year after moving to Australia.
How employee share scheme interests are treated
Many expats moving to Australia also participate in employee share schemes.
In Australia (as in many countries) gains made from the participation in employee share schemes are considered to taxable as employment income.
Employers in Australia must also prepare annual payment summaries (known as ESS Payment Summaries) where they are required to report the total amount of income that an employee has earned that year through participation in an employee share scheme or employee options plan. This can be a complicated area of tax for many expatriates.
One issue which many expatriates can tend to overlook is if they receive foreign salary income or employee share scheme income after they move to Australia, then they will be taxable on that income even if they performed the employment duties outside Australia.
Hence expats moving to Australia who may be due to deferred bonuses or other employment-related compensation need to be aware that such income is taxable in Australia.
If the tax is paid overseas on that income then generally the expat will be able to claim a foreign income tax offset (foreign tax credit) in Australia for tax already paid overseas. It is only in rare circumstances that employment-related payments would not be taxable income in Australia.
If you have questions about cross border salary payments or other employment income issues which you need to be resolved CST Tax Advisors can assist you.
Written by: Matthew Marcarian from CST Tax Advisors
Under Australia’s foreign investment framework, foreign persons need to apply for foreign investment approval before purchasing residential real estate in Australia.
The Government’s policy is to channel foreign investment into new dwellings as this creates additional jobs in the construction industry and helps support economic growth. Foreign investment applications are considered in light of this principle.
It is important that foreign investors understand and comply with Australia’s foreign investment framework as strict penalties may apply for breaches of this law, including orders requiring you to dispose of property purchased by you without approval.
New Dwellings and Vacant Land
Foreign persons generally need to apply and/ or receive foreign investment approval before purchasing new dwellings and vacant residential land for development.
Applications to purchase new dwellings are usually approved without conditions. Applications to purchase vacant land are normally approved subject to construction being completed within four years. Once new dwellings are built or purchased, they may be rented out by the foreign investor, sold, or retained for their own use.
Land that has previously had an established dwelling on it would generally not be treated as vacant land for the purposes of Australia’s foreign investment framework. Further, a single dwelling that has been built to replace one or more demolished established dwellings would generally not be considered a new dwelling for the purposes of Australia’s foreign investment framework.
Non-resident foreign persons are generally prohibited from purchasing established dwellings in Australia. However, reflecting the fact that foreign persons who are temporary residents need a place to live during their time in Australia, temporary residents can apply to purchase one established dwelling to use as a residence while they live in Australia.
The purchase of an established dwelling in these circumstances would normally be conditional on the foreign person selling the property when they leave Australia or cease being a temporary resident and do not become a permanent resident or an Australian citizen.
In addition to his, temporary residents cannot acquire established dwellings to rent out or for use as a holiday home.
The Application Process
Foreign persons should apply for approval before taking an interest in residential real estate. However, foreign persons who want to minimise the risk of a property they are interested in purchasing being sold to someone else before they receive foreign investment approval can enter into a contract as long as the contract is conditional on receiving foreign investment approval.
Foreign persons are required to pay a fee for each application made or notice given, under the Act and the Regulation (limited exceptions apply).
The fees that are payable for residential land applications depend on the price for the acquisition of the interest and can end up being quite costly, another reason why foreign persons may wish to enter into a conditional contract.
The board has a statutory period of 30 days to make a decision from the date of full payment of the relevant fee on the application, and a further 10 days to notify the applicant of the outcome.
Article from: NL & Associates
Written by: Nicole Leggat
Professional Indemnity Insurance (PI) is required by expat professionals whilst operating their business in Australia.
Professionals are someone who offers services or advice in a specialised field or discipline. The professional is qualified to provide such advice/service usually for a fee/remuneration.
Traditional professionals include accountants, lawyers, insurance brokers, engineers, architects, real estate agents, and consultants. Non-traditional professionals include agricultural consultants, migration consultants, freelance journalists, translators, naturopaths and any business which provides professional services or advice.
Professional Indemnity is designed to protect Insured Professionals from economic loss, sustained by third parties as a result of the performance of the Insured’s professional services and advice.
The (PI) policy provides the Insured cover for Investigation, Defence Costs, and Settlements.
Professional Indemnity can also be known as E&O (Errors and Omissions) or Professional Liability Insurance.
Most PI policies operate on a “claims made and notified” basis. This means a claim must first be made against the Insured and notified to the Insurer during that period of insurance.
Therefore, when the Insured first becomes aware of a claim or circumstances which may give rise to a claim against them, they must notify the Insurer of this event during that period of insurance. The Period of Insurance is always clearly outlined on the policy schedule.
A claim against the Insured includes a verbal notice made against the Insured during the Period of Insurance, as well as a written notice for damages by a third party or civil proceeding.
Below are examples of claims recently received by Insurers we deal with:-
The Insured was hired to provide advice to a customer regarding the correct management of their crops. The Insured failed to consider the soil residual herbicide that had been applied to the crops in the prior year and as a result, the crops failed. The client sought reimbursement for loss of income and yield from the Insured.
The Professional Indemnity Insurer appointed lawyers, assessed the loss and payment was made in the amount of $60,000 to the client subject to them signing a deed of release.
A former client made a claim against the Insured regarding negligent advice in regard to making contributions into their Self-Managed Super Funds (SMSF).
The client’s Financial Planner had prepared a Statement of Advice recommending the superannuation contributions, which the Insured approved. As a result, the claimant had to pay $150,000 in excess contributions liability.
The Insured claimed under the PI Policy and commercial settlement was reached between the parties and a deed of release was signed. The payment amount was $99,000.
Land Surveyor and Town Planning/Building Surveyor
A claim for loss was made against the Insured in regards to providing incorrect advice on the potential sub-division of a property a client of the Insured had purchased.
The Insured was covered under his PI Policy for legal and defense costs in responding to the claim. A settlement payment of $800,000 was made.
The above claims scenarios are evidence of the importance of Professional Indemnity Insurance for any business person who provides professional services and/or advice.
Written by: Michael McMahon from Gibson Insurance