The property pool for non-members

I was wondering about the elementary stages of buying a house for a foreign resident in other country and it raised my curiosity all the more when while driving my friends got into this discussion of what could be the possible complexities for a foreign resident to buy a real estate in Australia or there would be none<maybe it could be as effortless as it can get>.

So research says that the proportion of first home buyers have dipped down the lowest this year than in past 20 years. The actual number of first home buyers were around 6000 in Australia which was the lowest since February this year. But at the same time Investment lending took a leap this year which meant that the first home owners could not afford to purchase but because of relative affordability it was quite smooth for the investors to invest in properties. In a market where the local investors investment is on a high in, the foreign real estate investors are infusing their money in a ratio of one in every eight properties in this country. 

Now comes the question as to, "How effortless the sailing is or is going to be for the foreign investors?" A  non statutory body called FIRB(Foreign Investment Review Board-www.firb.gov.au) regulates and advice the Treasurer and Government on Australia's Foreign Investments and conducts its Administration. The guidelines mentioned on the FIRB website contains details regarding the conditions for a Temporary Resident as well as a Non Resident/Short term visa holder has to take into account before buying a house. The Government's policy as mentioned is to encourage foreign investment where it is increasing Australia's housing stock; which is channeling the foreign investment into "new housing" and bring benefits to local industry. Thus the conditions mentioned in the guidelines considers the above policy application in mind. 

This means if you are a temporary resident or a foreign buyer for that matter you can buy a new dwelling with application which is always approved in normal circumstances, also if you buy a vacant land it would normally be approved(condition being that the ongoing construction begins within 24 months). Its only when you want to purchase an already established dwelling and if you are a student or any other temporary visa holder, there is a restriction of buying it solely for your residential purpose and sell it once it ceases to be your residence. Whereas non residents cannot buy any established or second hand dwellings. This still makes it clearly an easy job for foreign residents to buy property in Australia.

It would be interesting to study the tax effects in Australia for the same for the foreign residents. Would get back with that soon. For now i should go and worry about my dinner.

US Federal Reserve stimulus

I have been reading about the US Federal Reserve's recent stimulus policy announcement and was asked a very basic question by my husband; "whether printing more money would really help to make the market more wealthier?"

I think the major policy initiative which is termed as "quantitative easing" which broadly covers reducing the mortgage rate, and that too through two major sources only which are housing market and stock market.
It would merely benefit the rich more than the poor...It does not seem to benefit the poor here.  More buying houses means prices there would be soaring more for properties ultimately leading to inflation But with the banks having their magnifying glasses on towards lending money would only lend it to those with strong credit records.

Secondly more money would splurge into the stock market as investors would want to earn maximum returns from low rate securities as well as risky ones as well. This again i feel is a blessing for only the investment friendly population, the reason for the same being less earning and more spending which would not leave much money for investments.

With all this i end it here for now with a hope that with the lower interest rates its more property development, more business investments and more lending by the banks. 

Australian Tax & Individuals

So as i was trying to get a hang of how the Australian Tax System works, with coming from a country where tax can be pretty much a maze for a dummy and very much like an ocean for a professional/student to keep up with, i feel the Australian tax is quite straight forward but not forgetting that all the tax systems have been designed such that the government would find all the conceivable ways in which a person can be taxed.:).

An Individual in Australia is taxed under three broad categories: Personal Income, Capital gain and Business Income. Also one more branch of it which i found important was that if you are a permanent resident in Australia you need to disclose your international sources of income which would be exempted if you have paid tax in the country of your income, which according to me is very well described on the Australian Taxation Office website: www.ato.gov.au 

The rates of tax to be paid fall in only two separate categories with a different set of rates for foreign residents residing in Australia. So if you are a permanent resident, along with progressing in your career graph you need to prepare yourself with an adjacent goal to pay further more tax!

Now before you take up a job or start earning you need to apply for a Tax File Number which would also be required to be given to the employers which is how the very frequently heard term PAYG works, wherein the employer deducts the tax required to be deducted according to the tax rates applicable. Here it becomes very important to determine your employment status, that is whether you re working as an employer or a contractor. 

Alright! Its coffee time for me now and would soon get back with one more write up whilst understanding the different aspects of the Australian Taxation System.