Emma Elsworth and Yuan (Nathan) Xu of Nevett Ford Lawyers
Melbourne recently returned from Beijing, China after meeting with various
parties involved in Australian real estate.
In their numerous discussions with various stakeholders, the key issue
was not:
the Victorian Government's increase on 1 July
2016 of the foreign purchaser stamp duty surcharge from 3% to 7% on the
purchase price of a property,
but
the lack of tier 1 lenders in the marketplace
advancing funds to foreign purchasers of Australian real estate.
The...
Thursday, 19 May 2016
Tuesday, 10 May 2016
Builders Warranties
Under the Domestic Building
Contracts Act, statutory warranties as to quality of workmanship are deemed
to be given by all builders carrying out domestic building work under domestic
building contracts, and these obligations cannot be negatived by anything in
the building contract. Domestic building
work includes the construction of a house or renovation or alterations to a
house. What is not always understood is
that under the Domestic Building
Contracts Act the benefit of these warranties is available to subsequent
owners of the...
Tuesday, 3 May 2016
Termites and New Homes
Termites cause more damage to Australian houses than fire,
floods and storms combined. Moreover,
termite damage is usually not covered by home insurance.
All new houses built within areas designated by councils
to be subjected to termite infestation, must have termite infestation
protection measures in accordance with Australian Standard AS3660.1-2000 under Building Regulations 2006 (Vic). You
may find out whether your property is located within a designated termite
infestation area by consulting your local council.
Before...
Foreign resident capital gains tax withholding payments
On 25 February 2016 the Tax and Superannuation
Laws Amendment (2015 Measures No. 6) Act 2016 (Cth) was enacted. This Act introduces a 10% non-final
withholding tax on payments made to foreign residents under contracts entered
into on or after 1 July 2016 to dispose of certain taxable Australian
property (Assets).
The Assets affected are:
real property in Australia (excluding real
estate with a market value under $2 million);
lease premiums for Australian leases;
certain mining, quarrying and prospecting rights;
interests...
SMSF related party borrowings under “Safe Harbour” guidelines
In recent years the ATO adopted the view that all loans by
related parties to trustees of SMSF’s should be on arm’s length terms to ensure
the income of the SMSF is not taxed at the top marginal rate.
In April 2016, the ATO issued Practical Compliance Guideline
2016/5 which contains the ATO’s approach to determining what are arm’s length
borrowing terms for LRBA’s.
PCG 2016/5 sets out “Safe Harbour” terms on which SMSF
trustees may structure their LRBA’s consistent with an arm’s length
dealing. Two Safe Harbour models are
provided: one...
Buy/Sell Agreements
It is commonly recognised that
small proprietary limited companies and unit trusts are the most popular
vehicles for parties to come together to establish and operate a business or to
participate in an investment. The most well managed of those vehicles are regulated
by shareholder agreements (for companies) and unit holder’s agreements (for
unit trusts).
In recent years a trend has developed where many of those
agreements now contain provisions which require death and total permanent
disability insurance for each shareholder/unitholder...
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