Assistance to Foreign Property Buyers

Assistance to Foreign Property Buyers.

SA Listings has recently assisted a number of foreign buyers successfully purchase property in South Australia. It is essential, as a foreign purchaser considering a property purchase in Australia, you understand the complex rules surrounding the transaction. SA Listings offers a Buyers Agent Service to guide you through the process, assisting with government approvals, property selection, finance approvals, contracts and finally settlement on your new Australian property. We are also able to assist with finding tenants through our experienced property management partners.

In general, foreigners buyers are only permitted to purchase properties in Australia that are either new or under construction and each individual purchase transaction must be approved by the Foreign Investment Review Board (FIRB).

Who needs FIRB approval?

Essentially, if you are not an Australian citizen or are a temporary resident on a visa living in Australia, you may need to seek FIRB approval for a property purchase.  SA Listings can assist you with achieving FIRB approval,  contact us for a discussion of your individual circumstances.

Taxation and property purchase costs

There are other costs associated with purchasing property in Australia. As with most other countries, stamp duty is payable on the transaction. Additionally, as a foreign purchaser, with any transaction in South Australia you now must pay a ‘Foreign Owner Surcharge’ amounting to an additional 7% of the purchase price on top of normal stamp duty. SA Listings can assist in helping you choose the right property to minimise any additional costs.

There are also a number of other costs attached to a property purchase which must be considered, including legal & conveyancing fees, loan application fees, insurance cover and pro-rata adjustments for council or water rates, and building or pest inspection fees. Additionally, in South Australia, to complete any real estate transaction a conveyancer or solicitor must be engaged to carry out the actual process of the transfer of title.

Buyer’s Agent Service

As with any property investment, it is essential the correct property is chosen in order to achieve the best return on investment. SA Listings can assist your decision through our Buyers Agent Service – of course there is no obligation or cost for any initial discussion.

We have successfully helped a number of foreign buyers navigate the purchase process – we can do the same for you. Contact us for more information.

Justine Thomson

1 July Property Legislation Update

Well we are a few weeks into the new financial year and, as is usual, property owners and investors should be aware of various changes to property rules from the ATO.

Australia wide, the greatest and possibly the one with the biggest impact on investors, new home buyers and developers is the requirement for purchasers of new residential premises or potential residential land to withhold an amount of the contract price and pay this directly to the ATO at settlement.

Essentially, this means for affected property transactions, purchasers will need to:

  • split the amount of GST from the total purchase price,
  • pay the GST component directly to the ATO by a disbursement at settlement, and
  • pay the GST exclusive purchase price to the property developer (vendor).

The new rule imposes requirements onto the vendor/developer as well. Developers need to give written notification to the purchasers when they need to withhold.

The actual liability for the GST remains with the property developer, however there are no changes to how property developers lodge their business activity statements.

Should you be contemplating purchasing new residential property or potential residential land there are a number of forms that need to be completed by the purchaser or their representative (a conveyancer or solicitor) after contract signing and prior to settlement. Speak to your agent or conveyancer to ensure you comply with the new requirements or visit https://bit.ly/2tLbVri for more information from the ATO.

1 July 2018 also marks the date from which first home buyers can access super contributions for the purpose of buying their first home. Since 1 July 2017 eligible Australians have been able to make voluntary super contributions of up to $15,000 a year, to a maximum of $30,000 over more than one year, to their superannuation account to help purchase their first home. Since 1 July 2018, eligible Australians are able to apply to their super funds to release these contributions (and earnings) for the purposes of purchasing a first home.

Finally, another change on 1 July 2018: Australians aged 65 years + can make a non-concessional (after-tax) contribution into their super account of up to $300,000 from the sale proceeds of their family home (main residence) if they have owned the property for at least 10 years. Couples will be able to contribute up to $300,000 each, giving a total contribution of up to $600,000.

Again, please visit the ATO website https://bit.ly/2udPt9Jor discuss with your financial advisor for detailed information related to your particular circumstances.

Justine Thomson

 

Selling a Tenanted Property

Selling a rental with tenants requires a number of additional requirements the owner and agent must abide by to ensure tenant rights under Legislation are met. While these requirements initially may seem onerous, by keeping a tenant “in the loop” with timely communication, any issues can be dealt with before they become insurmountable problems. There are pros and cons to selling a tenanted property:

Pros:

  • Rental income continues while the property is on the market.
  • Buyers benefit from purchasing a tenanted property – reducing costs such as letting fees and time vacant after settlement.
  • Potential buyers see the property as “rentable”

Cons:

  • Increased legislative requirements for notice to tenant
  • Reduced flexibility for opens
  • Possible lack of control over the standard of presentation of the property
  • Potential buyer pool – buyers after vacant possession may not be interested

A successful campaign of a tenanted rental keeps the tenant “in the loop” before, during and after the sale. A tenant who does not know what is going on, is uncertain of their future, or is kept in the dark with open times and notice will likely not be accommodating with access to the property for opens.

So, how do you do this?

Notice of Sale

It is a requirement before entering a residential tenancy agreement to advise a prospective tenant if owners have or intend to advertise the property for sale. A tenant can terminate a tenancy if the owner enters into a contract for the sale of the property within 2 months after the start of the tenancy agreement and did not inform the tenant of this intention.

Issue Correct Notices within Required Timeframes

On deciding to sell a tenanted rental property, an owner must advise the tenant with at least 14 days written notice they have entered into a sales agency agreement. Advertising the property or access to the property for the purpose of showing prospective purchasers cannot occur before this 14-day timeframe expires.

Once the initial 14 days has passed, the right of entry to the property for opens is outlined in the Act. These requirements include no more than 2 occasions within any 7-day period, at a time previously arranged with agreement of the tenant. If an agreement cannot be reached, at a time within normal working hours with reasonable notice. Reasonable notice is not defined, but at least 7 days minimum is advised.

Once the property is sold, the tenant must be advised in writing within 14 days or as soon as possible after the contract of sale is entered into of the name of the purchaser and the date from which rent is to be paid to him or her.

Remember, the tenant has a right to stay at the property during any open inspections, including on auction day. The tenant is also entitled to the quiet enjoyment of the property – continuous driving past or prospective purchasers walking around the property may not meet this requirement.

SA Listings tips:

  • Start an open and honest dialogue with the tenant as soon as the decision to sell the property is made.
  • All notices MUST be served in a timely manner, erring on the side of caution.
  • Provide the tenant with a complete schedule of inspections as soon as possible.
  • Any property manager MUST be in the loop with the decision to sell, plus the intended schedule. Consider combining routine inspections with other required access (such as photo sessions) in order to minimise tenant disruption.
  • Consider a small rent reduction throughout the campaign. This will show the tenant you are conscious of the disruption to the tenant’s enjoyment of the property.
  • Stay flexible. The tenant must not unreasonably refuse to allow access. However, be prepared and willing to negotiate access times.

SA listings will happily arrange for all of the above requirements to ensure your sale campaign runs smoothly. We also partner with experienced property managers who understand the needs of both tenants and landlords throughout a sales campaign.

Planning and preparation is needed. But if done, there is no reason the sale of a tenanted property should not go smoothly. Contact us for more information.

Justine Thomson

Exceptional Sale Results without Excessive Commissions

The results are in! SA Listings has selected our last 18 recent sales to statistically prove you get the same results, if not better from a fixed fee Agent compared to a traditional commission based Agent. The results also prove that brand does not matter when selling your home. SA Listings, a relatively new player in the Adelaide real estate market has successfully sold the last 18 properties with an average of 23 days on market, achieving an average of full Vendors asking price and savings in excess of $110,000 in Agent fees to boot!

SA LISTINGS – CLIENT RESULTS AND AGENT FEE SAVINGS
Property Address % of Asking Price Days on Market Agent Fee Saved*
92 Folland Ave Northgate 105.24% 4 $7,312
72 Rapid Ave Lightsview 102.19% 7 $9,400
1/91 Myrtle St Prospect 100.00% 31 $4,590
11 Allen Ave Brooklyn Park 105.00% 11 $7,310
4 Paddington Ave Northgate 108.00% 9 $7,662
109/220 Greenhill Rd Eastwood 98.33% 49 $6,980
140C North East Rd Walkerville 99.11% 34 $6,320
140B North East Rd Walkerville 98.23% 31 $6,210
14 Epsilon Crt Woodcroft 100.00% 16 $3,250
14 Rapid Ave Lightsview 100.00% 52 $1,920
8 Welsh Rd Lightsview 108.70% 5 $7,750
14 Holmeswood Crt Para Hills West 98.00% 46 $3,680
74 Rapid Ave Lightsview 100.00% 1 $7,360
10 Rozells Ave Lightsview 100.00% 7 $7,150
2 Rivergum Cls Walkey Heights 97.00% 20 $6,860
13 Welsh Rd Lightsview 97.22% 21 $9,400
19 Rapid Ave Lightsview 100.00% 26 $6,540
21 Rapid Ave Lightsview 100.00% 43 $5,000

Average Ask Price

Average Days on Market Total Agent Fee Savings
100.95% 23 $114,694
*Savings based on traditional Agent Commission in SA of 2.2% inclusive of GST

The savings in Agent fees is conservative, as it does not take into account significant savings achieved by our clients in marketing fees. Several of the properties listed above had no marketing fees at all as they were successfully matched to purchasers on the SA Listings buyer database. We have in fact, been told by our clients of well known brand name Agents charging additional fees of up to $2,000 for use of pre-market listing techniques, whereby, your property is listed on their website and database for viewing only by their registered subscribers, prior to listing to the general public. This is astounding! One would expect the Agent commission to cover the cost of the Agent actually matching the registered subscribers on their database to your property. Is that not their job? At SA Listings, we database match and contact all relevant parties we believe would be interested in your property. This service is incorporated in the fixed fee package at no additional cost to you, we believe our job as your Agent is to sell the property for the very best price at an affordable cost to youwithout fee gouging!

Also as a consumer be aware, there are some new Agencies providing a low fixed fee but the package does not incorporate a full agent service. Please read the fine print and ask questions of the Agency selling you the packages.

Remember, SA Listings provides a full agent service for an affordable fee with the highest service from listing to settlement, to find out more visit www.salistings.com.au

Justine Thomson

National Property Statistics

12 MONTH MEDIAN GROWTH – SEPTEMBER 2017

HOUSES UNITS
ADELAIDE 2.5% 4.1%
MELBOURNE 11.5% 3.5%
SYDNEY 7.8% 4.3%
BRISBANE 3.3% -2.1%
CANBERRA 7.7% 2.9%
DARWIN -9.1% -8.7%
PERTH -2.4% -3.6%
HOBART 6.8% 2.4%

12 MONTH MEDIAN PRICES – SEPTEMBER 2017

HOUSES UNITS
ADELAIDE $445,000 $375,000
MELBOURNE $702,000 $520,000
SYDNEY $940,000 $715,000
BRISBANE $530,000 $410,000
CANBERRA $655,000 $430,000
DARWIN $492,000 $390,000
PERTH $500,000 $400,000
HOBART $390,000 $290,000

If interested in suburb statistics for your local area in South Australia, please email info@salistings.com.au

Justine Thomson

Prescribed Minimum Advertising Price

The Prescribed Minimum Advertising Price or PMAP as known in the real estate industry, relates to legislation in South Australia prescribing the amount an Agent can advertise a property at. The price you and your Agent list in the Sales Agency Agreement will affect the price for which the property can be advertised. This legislation was designed to protect consumers from properties being advertised below current market expectations, a term referred to in the industry as underquoting to bait advertise.

In a Sales Agency Agreement, the Agent will provide a genuine estimate of the likely selling price and this figure is included in “Agents Estimated Selling Price”. The Agents estimated selling price is based on a range of factors including but not limited to, current comparable market sales in your area, the condition of your property, location within the area and any other factors that may impact price. For example, a property positioned on a main road may be appraised lower than the same property in a quiet street in the same area. A good Agent will know the local area well and will provide supporting evidence of how the “Agents Estimated Selling Price” was derived. This is not a guarantee you will receive this price when the property is presented to market, however, it is a genuine estimate based on supporting evidence. In the Sales Agency Agreement, the Agent must express the “Agents Estimated Selling Price” as a single figure without any words or symbols. If you think the estimate is not right, or want comfort in the figure provided you can pay a licensed Valuer to seek an independent valuation of the property.

The “Vendors Acceptable Price” is also included in the Sales Agency Agreement. This is the amount you, the Vendor wants from the sale of your property. When determining this price, you may consider the information provided by the Agent when appraising the property, research sale prices in your area, consider an independent valuation from a licensed Valuer and not allow emotion to cloud your judgment. This figure also needs to be presented as a single figure without any words or symbols.

How does the PMAP all come together? The PMAP is based on the “Agents Estimated Selling Price” and the “Vendors Acceptable Price” listed in the Sales Agency Agreement. The prescribed minimum advertised price is the greater of the “Agents Estimated Selling Price” or the “Vendors Acceptable Price”.

Let’s give an example to help assist in explaining the PMAP. After considering all variables including current market sales in your area, your Agent appraises your property with an “Agents Estimated Selling Price” of $550,000. You have considered the appraisal, researched your area and discussed with your partner and agree your “Vendors Acceptable Price” will be $570,000. The Prescribed Minimum Advertising Price for your property will be $570,000. Your Agent cannot advertise the property at less than this amount.

It is very important you have a good relationship with your Agent, as the advertised price can impact the campaign from the get go. There is no advantage gained by advertising your property above current market conditions. Consumers are well informed these days and will research the area they are looking to buy in with sales information and appraisals at their ready disposal via the world wide web! By advertising your property above market, the likely result is little or no enquiry and a property potentially not selling.

Let’s give another example, to reinforce the PMAP.

“Agents Estimated Selling Price”      $450,000

“Vendors Acceptable Price”               $430,000

The prescribed minimum advertising price is $450,000.

When determining the appraisal of your home you need to have trust and faith in your Agent and understand they have the best understanding of your local area sales and are experts in their field. If you do not trust your Agent’s knowledge there is no point pursuing a Sales Agency Agreement with them. To give an analogy, if you went to your Accountant to do your tax return would you be telling them “this item is tax deductible”, when they are the qualified expert. If you are, then you need a new Accountant!

Justine Thomson

Top Tips for First Home Buyers

To assist First Home Buyers get a step up on the property ladder, there are a few incentives you need to be aware of. To help assist, SA Listings has compiled this go to “Top Tips” for first home buyers looking to purchase in SA.

Top Tips Towards Home Ownership

First Home Super Saver Scheme: You can make contributions to your super account from your before tax pay to save for a house deposit. You are limited to $30,000 per person and capped at $15,000 per year. If you are self employed or your employer does not allow you to do salary sacrifice, you can claim a tax deduction on the after-tax contributions. To find out more, contact your Superannuation Fund direct.

Stamp Duty Savings: There are a couple of ways you can save on shelling out too much stamp duty! The SA Government allows for a stamp duty concession if you purchase an apartment off the plan anywhere in SA. What does “off the plan” mean? This means it is a new building that is yet to be constructed or it is a new building for which construction has commenced and the Commissioner is satisfied the work has not been substantially completed or it is an existing building where the Commissioner is satisfied that the building is to be substantially refurbished and the work has not yet commenced or has not been substantially completed.

The amount of stamp duty concession that applies depends on two things:

  1. What stage the construction is at from the date you enter the contract and 
  2. What the market value of the apartment is that you purchase.

To calculate how much stamp duty you need to pay for an “off-the-plan” apartment, there is a great calculator available on the Revenue SA websiteStamp Duty Calculator

Another way to save on stamp duty is to build. By purchasing a block of land and then building, you only pay stamp duty on the land, saving you considerable money. This additional money can be put towards the build rather than to State Government coffers. For example, if you buy a block of land for $150,000 and build a home for $200,000, you will only pay stamp duty on the land only. At current rates the stamp duty on $150,000 would be $4,830. If you had purchased an established home at $350,000 the stamp duty would be $13,830. This is a saving of $9,000! As a first home buyer this is a considerable amount of savings.

First Home Owners Grant (FHOG): The FHOG is a once of grant paid to eligible first home buyers on the purchase of a new build or construction of a new home. To be eligible for the grant the market value of the property purchased must be $575,000 or less. The amount of the FHOG is $15,000. If you purchase a newly built home, the grant is paid on settlement, if you construct a new build the grant is paid on date of first progress payment.

Pre-construction Grant for “Off-The-Plan” Apartment Purchases: For contracts of “off-the-plan” apartments entered into between 20 June 2017 and 30 September 2017 the State Government is currently offering a $10,000 pre-construction grant.

Savings: Don’t forget good old fashion savings. By saving a few dollars everyday, this can go a long way towards your first home deposit!

At SA Listings we know it is tough for first home buyers to dip their toe onto the property ladder but with sound knowledge and a good understanding of managing your money, the dream can be a reality! We hope this blog assists all those aspiring first home owners and should you have any questions, please send us an email or message us on facebook and we would be happy to help.

Justine Thomson

Please note: Information provided in this blog is current as at date of going to print 

Top Reno Tips Before Listing

I am often asked as an Agent, “What reno’s should I do to my home to maximise the price I achieve on sale?” Usually when a person is asking me this question, the work they are doing to the home is not for them to enjoy but to present the property as best they can to maximise return.

To answer the question, there are 5 key reno’s that will maximise the property price.

Paint: this can be done affordably if you manage yourself and can literally add tens of thousands to the sale price. Internally use a neutral white colour on all walls and ceilings. Do not do feature walls, this can polarise people if they do not have the same taste as you. Bring in colour with soft furnishings and wall art. It is also a good idea to freshen up external timber and gutters with a lick of paint if required.

Update the Kitchen: this is a major selling point of a home. Update door handles, fixtures and fittings. If the budget allows and the cabinetry/benchtops are out-dated, consider replacing the cabinetry with white laminate and upgrade the benchtops.

Update the Bathroom: you do not need to rip out and replace the entire bathroom but look at the quality of the sink, tapware and showerhead. If the tiles are dated, consider replacing or painting. Another low cost exercise is to clean all the mould from the grout. There are great products available on the market to make this job simple and easy.

Spruce up the Garden: the front garden is the first thing a prospective buyer sees. Make sure it is neat, tidy and presents well. Replace any dead plants with new, mow lawns and remove all weeds.

Repair and Patch: Consider fixing any maintenance issues including any holes/cracks in walls, cracked tiles, worn timbers and any appliances not working.

Your home is one of your most important assets and when listing to market you want to maximise your dollar return. Some hard work prior to listing should pay good dividends and will reflect in the final sale price.

Justine Thomson

 

Take Advantage of a Government Incentive


NRAS, or the National Rental Affordability Scheme. Don’t be bamboozled by the big words, the scheme is easy to understand and provides benefits to a wide demographic of people in Australia. Not only do investors benefit from NRAS but so do tenants and those looking to get a step up on the property ladder. So what is it? Why did it come about? And how does it work?

NRAS is a Federal Government initiative introduced in 2008. It was designed to encourage investment in residential housing to assist people on low to moderate incomes with an opportunity to rent homes at 20% below market rent values. It is not social housing; rather, it is a scheme to provide affordable private rental homes to individuals and families who meet the income threshold. To attract investors, tax-free incentives are provided to those who invest in and own approved NRAS properties.

NRAS was designed to assist in addressing housing supply and affordability. Pressure on the private rental sector, increased rents, the difficulty of low to middle income households to access affordable private rental homes, plus the reduced supply of public housing contributed to the NRAS initiative being created.

NRAS provides benefits to both investors and tenants:

Tenants: Eligible tenants can access private rental accommodation at 20% below the market rate. Tenants’ income may increase up to 25% before their eligibility is affected. Current income eligibility rates are available here: https://goo.gl/vHuAtF

If you are interested in renting an NRAS property and meet the eligibility criteria, it can be an affordable housing solution, to assist you in meeting your financial goals.

Investors: Approved investors are eligible to receive the NRAS incentive for up to 10 years for each approved dwelling where the conditions of allocation for the dwelling are met including renting the property at least 20% below market value rent.

The NRAS incentive for the 2017/2018 year is as follows:

Federal Contribution:          $8,335.75

State Contribution:               $2,778.58

Total Incentive:                    $11,114.33

The NRAS incentive comprises two components: the Federal Government contribution is a tax offset and the State Government contribution is a direct cash payment.

The benefits for investors can be significant. For example: If Jane invests in an NRAS property where the market rent is $300, she must rent the property out at $240 per week to be eligible for the NRAS incentive. Jane effectively receives $3,120 less in rent per annum for her property. However this is more than compensated by the above annual NRAS incentive she receives from the Federal and State Government. To understand the full benefit of the NRAS incentive and what it means to you financially, it is best to speak with a qualified Accountant or Financial Planner before purchasing an NRAS property.

SA Listings has a strong understanding of NRAS and works closely with relevant providers in South Australia. SA Listings currently has a NRAS property available in Evanston, South Australia. To find out more about NRAS either as an investor or as a tenant, please contact SA Listings for more information.

Justine Thomson

Preparing Your Home for Sale


Pay attention carefully, this blog could add thousands of dollars to the sale price achieved by your home, with only a relatively small outlay, plus some hard work and elbow grease! How? Well, the formula is simple:

  • Fresh paint on walls: preferably a neutral or crisp white – it’s amazing what a coat of paint will do
  • De-clutter: everything packed away in boxes, except the bare essentials
  • Minimal furniture: key pieces only with modern soft furnishings and accessories
  • Well kept garden: fresh mulch, neatly cut lawns and healthy plants
  • Clean windows and walls
  • Clean pavers and driveway
  • Repair any noticeable damage to the home: patch holes in walls for example
  • Remove mould from bathrooms and refresh grout
  • Basically, present a clean sparkling home that smells fresh!

Clients often ask how the home should look for photography and opens. To help clients visualise what is needed, I can provide pictures of furniture to be showcased in each room, such as those shown below. Take note, while each room in your home will not look exactly like this, I want clients to take away from these pictures the number of furniture pieces in each room and the way it is styled with the soft furnishings and accessories.

Finalcollage

The property image above, listed and sold recently by SA Listings, was styled for minimal cost and achieved a sale result of $46,000 in excess of Vendor expectations. Note the following from the photos:

  • Formal lounge includes 3 key furniture pieces: lounge, coffee table & cabinet
  • Bedroom includes 3 key pieces: bed and two side tables
  • Second bedroom includes 3 key pieces: bed, desk and chair
  • Kitchen: totally clean bench tops with exception of minimal accessories
  • Lounge includes 4 key pieces: lounge, chair, cabinet and coffee table
  • Meals includes 2 key pieces: kitchen table and 6 chairs
  • Outdoor area includes 2 key pieces: outdoor table with chairs
  • Front yard and rear yard: neat, tidy and clean

In addition to the key furniture pieces, the soft furnishings and accessories in each room really make it pop. Think eye-popping paintings, lamps, neutral toned rugs and fresh flowers, with a common colour scheme. For bathrooms, all you require are matching towels and a beautiful soap dispenser on the vanity.

A big mistake commonly seen in homes on the market, is overcrowding in each room with too many furniture pieces. This can have the impact of making rooms appear small and cramped. Whilst it may be difficult to live without these pieces, for the limited period it is showcased to market it is well worth taking the pain to achieve the gain.

We hope you found this blog informative and if the styling process is too overwhelming, SA Listings can assist you with professional styling. We offer a unique styling service with affordable styling packages. To find out more contact us at http://www.salistings.com.au/contact

Justine Thomson