Pamela Yap founded the “International Property Concierge” and runs an Australian Property Investment Company helping international clients to invest in the Australian real estate market. Based in Melbourne, Pamela’s network spans key Australian cities including Sydney, Brisbane, Adelaide and Perth. Email her at Pamela@MelbournePropertyInvestmentGroup.com
The extent to which the Covid-19 pandemic has affected countries varies vastly, connected in part to the respective government’s handling of the situation. These national responses can be worlds apart – both in terms of efficacy and as survey data from YouGov shows, depending on the subsequent level of public approval. Countries included in the survey included the US, Australia and Malaysia among many others. The chart below shows that both Malaysia and Australia fared well in terms of responding to their citizens’ needs during the pandemic. The following two charts below by Gattan & Refsa both show the percentage of the Gross Domestic Product (GDP) figures the government of each respective countries has allocated as the stimulus package to bring the economy back on its feet both during and post Covid-19 pandemic. In fact, Malaysia is doing pretty well — having allocated over 15% of its GDP while Australia allocated close to 5% of its GDP with many programmes outlined to help citizens weather through the storm while creating opportunities for investors especially to enter into the Australian market.
The Australian Federal Government’s economic stimulus package which was recently announced included a series of significant tax concessions aimed at stimulating investment. As of July 3, 2020 – Businesses in Australia will be able to claim accelerated depreciation on new assets for the remainder of the year under the latest extension to the AUD150,000 (RM447,000) instant asset write-off programme that was unveiled by the Federal Government on June 9, 2020. After expanding the programme from assets worth $30,000 (RM89,400) to AUD150,000 (RM447,000) in response to the Covid-19 pandemic in March 2020, the Federal Government has now extended the deadline for making claims from July 1, 2020 to December 31, 2020. The Federal Government has also released its second stage of the financial support package to help businesses and households survive the escalating Covid-19 crisis. The second stage of the announced measures will mean that a total of AUD189 billion (RM563.22 billion) — across the forward estimates, is being injected into the Australian economy by the Federal Government which include the following: Payments to support households – UDS4 billion (RM11.92 billion)
Early release of superannuation – $1.2 billion (RM3.576 bililon)
JobKeeper Payment: AUD130 billion (RM387.4 billion)
Boosting Cash Flow for Employers – AUD31.9 billion (RM95.062 billion) Regulatory protection and financial support for businesses to stay in business Coronavirus Small and Medium-sized Enterprises (SME) Guarantee Scheme – up to AUD40 billion (RM119.2 billion) Providing temporary relief for financially distressed businesses On July 3, 2020, The Federal Government released an economic stimulus package designed to encourage business investment, maintain employment and support those impacted by Covid-19 through an instant / accelerated asset write off and cash payments. The package included important tax concessions. This will impact businesses with an aggregated turnover of less than AUD500 million (RM1.490 billion) which will benefit from two tax concessions announced by the Morrison Government. In addition to the depreciation concessions, the stimulus package includes:
The latest announcement by the Federal Government to stimulate the Australian housing market is by way of providing AUD25,000 (RM74,500) for new residential purchases and renovations, thus further strengthening the property market as well as the Building / Construction industries. AUD25,000 (RM74,500) Home Builder Grant tostimulate new property purchases The latest stimulus for the property market by the Australian Federal Government includes an announcement of the AUD 25,000 (RM74,500)
grant for new housing construction that will give eligible Australians AUD25,000 (RM74,500) to build or substantially renovate their homes in an effort to boost demand in the construction sector and ease a predicted downturn. This is a good step forward — particularly in light of industry predictions that the economic downturn associated with the Covid-19 pandemic could see a sharp decline in building projects in the pipeline. However, there are a number of limitations associated with the qualification criteria for this grant which should be highlighted. In addition to the above incentive, this effort is further enhanced by local government policies to help first time home owners get into the property market with two key incentives: • Government rebate of between AUD10,000 (RM 29,800) to AUD20,000 (RM59,600) grant when purchasing one’s first home (Principal Place of Residence)
• Up to 95% loan for qualified first-time home buyers. Some good news for foreign investors and fellow Malaysians lie in the fact that they can take advantage of the above incentives in line with the Top Five reasons why any Malaysian should invest in Australian properties in 2020: Top Five Reasons Why Malaysians Should Invest In Australian Properties In 2020: (1) Benefit from a currency exchange rate of below RM3 against AUD1.
(2) Take advantage of the low interest rates for mortgages of sub 3%.
(3) Safe haven to secure the family’s future by diversifying one’s investment portfolio in stable markets. One can secure one’s future with a low entry point like this landed property in a growth suburb situated just 30 minutes from Melbourne’s Central Business District (CBD) with units priced below AUD399,000 (RM1.198 million). Check-out
www.melbournepropertyinvestmentgroup.com to find out more about these good deals.
• Protect Your investment with Guaranteed Rental Returns (GRR);
There are two examples of investment properties in Melbourne:
• Vanguard (with a GRR of 5% for 25 years – higher than the housing loan interest now) and
• Liberty One (guarantees 6% GRR for the next 25 years – without needing to pay until completion of the project in 2021 except for the booking fee.)
• Depreciation Tax Benefits: Australia has also introduced a depreciation tax which allows landlords to reduce their taxable rental income. They can do this by simply deducting 3.6% of the initial purchase price of their yearly rental incomes, allowing them to pay less tax. For more information, connect with International Property Concierge via Facebook or Linkedin to obtain the right tax advice from experienced investment advisory consultants in order to enjoy substantial savings on taxation and enjoy higher Return On Investment (ROI) on the investment properties.