Foreword
Australian real estate has consistently ranked first in overseas real estate investment with its advantages of stability and transparency. However, due to the very big difference between Australian socio-economic and China, many Chinese buyers are prone to some misunderstandings when investing in Australian real estate. In addition, for those who already own Australian real estate, some fees that should be paid Will be ignored. Today, Wanjia will bring you relevant knowledge pushes on these misunderstandings.
Common mistakes
Always rely on areas you are familiar with
Many people come to Australia to rent a house first, and then buy their own house when the time is right. When it comes to buying a house, the most common phenomenon is that you are more willing to pay attention to the areas you are familiar with or used to. But habit does not mean the most suitable, nor does it mean the best choice. Perseverance in a certain area may lead to a delay in finding a house that suits you, and the result is a long time.
Always choose investment housing based on self-occupancy criteria
The house is not only for self-occupation, but also a safe and efficient investment tool. The Australian real estate market is different from other countries and has its own unique advantages, including high rental return, low investment threshold, negative tax deduction, permanent property rights, and no inheritance tax. If you choose a few houses with relatively large potential according to your own situation, I believe you can have a good income! The house is indeed used for living, but its investment properties are more important in the long run! Buying a house is not to be tied to a certain place, but to hope to obtain wealth freedom by investing in real estate. Therefore, it is the most rational way to select real estate according to the investment criteria.
Limited understanding of transportation
The choice of the location to buy a house is the most important. When choosing the location of a property, one of the most important factors to consider is public transportation, but many buyers take the “train” among many transportation vehicles as a single measure. Other transportation vehicles Ignore it, in fact, you will miss many high-quality real estate.
Australia’s public transportation is a comprehensive network of trains, buses, light rails, and ferries. All kinds of public transportation have their own advantages in terms of convenience, comfort, and speed. Therefore, as long as the transportation is convenient, you don’t have to stick to a certain form of public transportation.
I always think house prices will fall
Considering the current government policies and the overall market environment, the Australian real estate market is in a healthy and stable state, and the long-term risks are minimal. With the decline in the number of approved constructions and the shortage of housing supply, future population growth will make the contradiction between supply and demand in the Australian real estate market more prominent, and the price trend of the real estate market will inevitably perform well. If you firmly believe that housing prices will fall again, but miss the best opportunity for regional development, for buyers who have failed to invest, it is worth the loss!
Australian house prices are fired by Chinese
The determinants of the overall rise in Australian housing market prices are supply and demand and construction costs. The increase in population and the rise in prices of land, labor, and building materials are the main reasons for the rise in the real estate market.
Some buyers believe that Australian house prices are “scrambled by the Chinese”. This is a one-sided and wrong view. Australian local buyers are the main buyers in the Australian real estate market. Their investment is scattered in different regions throughout Australia. Part of it is used for investment and negative tax deduction. This phenomenon may be because we are more willing to focus on areas where Chinese people are more concentrated, such as school districts or wealthy districts, resulting in the illusion that “Chinese buyers are all around.”
Fees to be borne
Secondly, for those who hold Australian property, what are our expenses?
Municipal Tax (Council Rates)
This tax is a municipal fee charged by each district government every year. The rate in each city area is slightly different. The fee is collected by the government in the area where the property is located. For example: garbage collection, public construction, etc., government investment is shared among family units for collection. In general, the rate of a villa will be a little higher than that of an apartment, and larger plots will be more expensive. Or some municipal governments are carrying out large-scale urban renewal projects for the people, which may also cause municipal fees to rise. The general range is $ 1500- $ 3000 Australian dollars.
Land Taxes
The land tax is collected according to the value of the investment land, not counting the house and other additions, nor the land value of the self-housing (each family can only count one house as “self-housing” when calculating the land tax Land tax exemption). For example, if the apartment occupies less land, its land tax will be much lower than that of the villa. Land tax is divided according to different states, and the way of collection is also different. In beautiful Western Australia, land tax is only calculated on the portion of pure land worth more than A $ 300,000.
Property Fee / Building Management Fee (Strata Fee / Body Corporate)-This part of the fee applies to apartment buildings and some townhouses
The property fee / building management fee usually consists of two parts, namely the “Administration Fund” and the “Capital Fund”. The administrative fund covers such expenses as water and electricity in public areas, building insurance, maintenance, cleaning, Expenses for management fees and other items of the property company. The capital reserve fund is used to pay for the future if the building needs major repairs or additional equipment. According to the size of the room type and other factors, the general property fee of a two-bedroom apartment is $ 3000- $ 6000 between.
Water rates (Water Rates)
The water fee in Australia consists of 2 parts. One is water service rates, which is similar to domestic sewage treatment fees, but unlike domestic billing, this part of the total water fee accounts for most of it. The other part is the water usage fee. Only when the water is used will the corresponding fee be incurred, accounting for a small part of the total water fee.
If you hold an investment house and rent the house, you can negotiate with the tenant, the pipeline service fee is borne by the landlord, and the tenant pays for the water usage. The average water fee is about $ 1500 per year.
Electricity Bill
The charging of electricity is calculated from the day the electricity is switched on. You may think that although the electricity is connected, but I have not used it, there should be no charge. Pilot International reminds you that Australia’s electricity bill is also composed of 2 parts. Part of it is electricity usage, which is calculated according to the actual electricity consumption.
The other part is the daily supply charge (Daily Supply Charge), which is charged according to the number of days, that is to say, even if the electricity is not used on this day, this charge must also be paid.
Gas bill
The calculation model of gas charges is similar to electricity charges, including gas use fees and gas supply service fees. The gas usage fee is calculated according to the actual usage quantity, while the service fee is calculated and charged in days.
Internet Bill
The Internet is already an indispensable element in modern life. At present, the Australian Federal Government is advancing a policy initiative, namely the popularization of NBN network, to improve the quality of network services. The network usage fee is calculated from the date of access to the network. Since the preferential schemes provided by different network service providers are not the same, you need to choose a network service provider suitable for you after comparing multiple schemes.
Finally, if you have an investment property for rent, a Property Management Fee will be incurred. This part of the expenses refers to the expenses incurred by the professional rental management staff and the third party promotion expenses. General total expenses range from 13% to 18% of annual rent.
