Property Law
Selling property to foreign buyers?
From 1 July 2018, you will find it more difficult to sell your house, land or apartment to foreign buyers. Foreign people buying residential real estate in Queensland now pay even more duty to the Office of State Revenue (OSR) for the Queensland Government.
We have previously written about Additional Foreign Acquirer Duty (AFAD) - the additional duty paid by foreign persons when buying residential real estate. Similar laws exists throughout Australia.
AFAD commenced on 1 October 2016, when an additional 3% of the purchase price was added to the amount of duty payable by foreign buyers.
From 1 July 2018, AFAD increases to 7%.
AFAD is an additional amount, as the foreign buyer is also required to pay the standard transfer duty which is payable by Australian citizens and permanent residents.
The Office of State Revenue has provided guidance as to how New Zealand citizens buying property will be treated in relation to AFAD.
Costs of moving up the property ladder
It is common for homeowners to want to upgrade their home.
If you have been paying down your mortgage debt for several years and the value of your home has increased, you may want to buy a more expensive property in a better location.
If your family has increased with the addition of children, not only do you want to upgrade, but you need to upgrade to a larger home.
As some government charges for property purchases increase every financial year, this is a good time to look at the costs of selling and buying - from 1st of July 2018.
We will provide an update on the additional costs payable by foreign persons in a separate article.
Lessons from the Royal Commission
In 2018, we have all listened with great interest to people recounting their experiences with the banking industry.
Whilst many of the encounters have had a devastating effect on the people involved, few of their stories surprise the legal profession - and no doubt many others.
At some future time, the Royal Commission will release a detailed report containing recommendations for a raft of changes.
When reading many of these harrowing stories, a consistent factor appeared to be that legal advice was either not obtained, or if obtained - was not acted upon.
Today's brief article is intended to give you an idea why a lawyer should often be the first person to speak with when contemplating many finance transactions.
This article is not about someone buying their first home, or someone upgrading their home. The emphasis of this article is very much on those people who are borrowing money secured against real estate assets to buy investments - such as real estate, shares or businesses.
Land Tax: lodge valuation objection by 8 May 2018
This week, property owners are receiving the Annual Land Valuation Notice from the State Valuation Service.
Many people won't pay much attention to the Notice as it's only a valuation of property you own. The Notice doesn't require you to pay any money.
The problem is that the valuations are used to calculate the Land Tax that you will pay in October. And if the valuations are unreasonably high, you have to take action now. Any objection has to be lodged by 8 May 2018.
It's worth taking this issue seriously. One government agency is determining the value of your property so that another government agency can send you a bill based solely on their own assessment.
No land tax if family trust owns your home
Earlier this week, clients sent me a Land Tax Assessment Notice for $18,000. Their family trust owns an impressive house, which they rent out.
They intend to move into the house as the family home. Bearing in mind that land tax is an annual charge, which usually increases each year - they wanted to know whether the land tax could be avoided.
Today's article provides some good news, as it explains the circumstances where Land Tax won't be payable on a family home owned by your family trust. You can enjoy the asset protection benefits of a Family Trust without paying the ever-increasing burden of annual land tax payments.
Most people own their home in their personal names & enjoy these financial benefits: ◦lower (or no) Transfer Duty ◦no Land Tax ◦no Capital Gains Tax
However, asset protection is becoming more important to many people, and they avoid owning assets in their personal names. The problem with owning your home in your family trust is that you lose these 3 major financial benefits.
Defective Goods & Unfair Contracts
Defective Goods & Unfair Contracts
As we are approaching the peak season for consumer spending, the Australian Competition & Consumer Commission has recently been promoting awareness of your legal rights when dealing with retailers.
Today's article brings to your attention some of these public statements made by the ACCC which you need to keep in mind when making a purchase.
Wills & Estates
Can you inspect a Will?
When someone passes away, family members and interested parties may want to obtain a copy of the Will.
Often, someone will be told that they are not entitled to see the Will or receive a copy of the Will - even when they are legally entitled to the document.
Today's article clarifies who is entitled to be provided with a copy of a Will.
Last week I received a phone call from a young man who was very disturbed at being told that he would not be provided with a copy of his father's Will. His father had remarried, and the new wife was the Executor of his estate - after he died prematurely following an accident. His father had previously reassured his son that he was well looked after in his Will. I could understand his real concerns about the behavior of his step-mother. He's heard all the stories!
Overseas or disadvantaged beneficiaries
We have previously spoken about the substantial financial benefits available to families when planning their financial affairs.
Today's article provides more examples of the potential financial benefits which are easily available to families who implement simple estate planning arrangements.
When a person passes away, any capital gain they made in respect of an applicable asset that they owned is disregarded, UNLESS the asset passes to a beneficiary that is an "exempt entity", such as a foreign resident.
This means that, where an applicable asset passes directly to a foreign resident - as usually occurs in a 'simple' Will - Capital Gains Tax is triggered.
That Capital Gains Tax can be overcome by passing the applicable asset into a Testamentary Discretionary Trust created in your Will.
Save Tax using a Smarter Will
It's impossible to over emphasise the huge financial benefits to families of working together when planning their financial affairs.
Most families do not plan, and the Australian Taxation Office thanks you for your generosity in contributing more of your income than is necessary.
Today's article presents a fairly straightforward scenario. The figures do the talking. The cost of a Will could be recouped in 3 months - even though the benefits could continue for decades.
The benefits for families in executing a plan can reap enormous financial rewards - which brings greater happiness through reducing financial stress.
The primary advantage of having a sophisticated will is that they include optional testamentary trusts. Where a testamentary trust is used, income can be split amongst children and there are preferential tax rates for distributions to minors under testamentary trusts.
How not to do a Financial Agreement
We constantly recommend being proactive about the management of our personal affairs. Taking action to prepare for the future.
The benefits of firstly - planning, and secondly - executing the plan, can reap enormous rewards for you and your family.
Today's article is about someone who planned for the breakdown of his marriage, but his execution of the plan was poor.
Don’t make a Will on your mobile
Helping your family get their legal affairs organised is not as easy as it sounds. For a start they have to want to do it!
When it comes to their Will, they don't deal with the consequences - and it isn't the most uplifting of topics!
The understandable media attention on a Supreme Court decision declaring that a Will made on a mobile phone was valid can be wrongly interpreted by some as meaning that they don't need to prepare a proper Will.
Son loses deceased father’s estate to ex-wife!
By failing to consider his father’s estate planning, this man had to give $150,000 of his dead father’s assets to his ex-wife!
This is a summary of a Family Court decision made in July 2017!
This relationship lasted a little over 8 years. However the parties didn't take action to finalise a property settlement until 5 years after separation. It is likely their focus was on providing a stable environment for their child - as they continued to share parenting.
3 1/2 years after separation, the husband received a large inheritance from his father's estate.