BLOGS

Any information contained in a blog on this website is general in nature only. The content of any blog posted below reflects information which is known to us as at the date of the posting of the blog. Please be aware that the law regularly changes. Please do not rely on the general information contained in the below blogs, instead we recommend that you contact us to obtain legal advice tailored to your own specific situation.

 

Dec20

Rental Bonds Online

From 30 January 2017, it will be mandatory for landlords and real estate agents to invite residential tenants to lodge their residential rental bonds in NSW using Rental Bonds Online (RBO).

When a new residential tenancy agreement is entered, then the landlord (or the landlord's real estate agent) must be registered with RBO and must invite the new tenant to provide their email address for the purpose of initiating the RBO bond lodgement process.

A landlord or agent who fails to invite a new tenant to lodge their bond using RBO, prior to accepting a bond, will be in breach of the Residential Tenancies Act.

Tenants who do not have internet access can continue to give their bond directly to the landlord or landlord's real estate agent. The landlord or agent is then required to lodge the bond with the Rental Bond Board using the current paper based method.

More information is available athttp://www.fairtrading.nsw.gov.au/rentalbondsonline

 


Dec12

Surcharge Land Tax

Amanda Quin - Monday, December 12, 2016

SURCHARGE LAND TAX

Surcharge Land Tax is payable by foreign persons in addition to any other land tax that may be payable on land held in NSW. The surcharge is 0.75% of the value of the land held by the foreign person.

There is no principal place of residence exemption or tax free threshold for the foreign persons land tax surcharge.

All other normal land tax exemptions do apply (ie the land tax surcharge is not paid on primary production land).

As per traditional land tax, the surcharge is only payable on the proportion owned by the foreign person.

Given the 200 day rule for permanent residents (see below paragraph titled WHO IS A FOREIGN PERSON), a person may be a foreign person one year, but not the next and so on.

If you or any company or trust that you control is a foreign person, then you may need to register with the OSR NSW in relation to surcharge land tax.

WHO IS A FOREIGN PERSON

FOREIGN PERSONS ARE:

  • Any natural person who is not ordinarily resident in Australia or does not have a right to reside in Australia.
  • Any natural person with only a temporary right to reside in Australia (irrespective of how long that temporary right may be or how long they have lived here).
  • Any natural person holding a permanent visa, who has not been in Australia for at least 200 days during the 12 months prior to the relevant liability date. (NB there are special rules for off the plan though).
  • Any discretionary trust where any foreign person (including foreign companies or foreign trusts) are a potential beneficiary (irrespective of whether any distributions have ever been made to them).
  • Any company or unit trust in which a foreign person (whether natural or otherwise) and the associates of that foreign person (even where the associates are Australian citizens) has at least a 20% interest in the entity.(For example, if your spouse was a UK citizen and if he or she held 5% of the shares in a company and you held 18% of the shares in that company, then because you are an associate of your spouse, then that makes that company a foreign person. Likewise with units trusts).
  • Any company or unit trust in which multiple foreign persons (and the associates of those persons) hold at least a 40% interest.

PEOPLE WHO ARE NOT FOREIGN PERSONS:

  • Australian Citizens, no matter whether they currently reside in Australia or not.
  • Any natural person holding a permanent visa, who has been in Australia for at least 200 days during the 12 months prior to the relevant liability date.
  • Any citizen of New Zealand who entered Australia legally and has resided in Australia for at least 200 days during the 12 months prior to the relevant liability date.
  • Any discretionary trust where none of the potential beneficiaries are foreign persons.

HOW TO MEASURE INTERESTS IN A COMPANY OR UNIT TRUST

A person holds an interest in an entity if that person, either alone or with one or more of their associates:

  • Controls that percentage of the voting power; or
  • Holds interests in that percentage of the issues securities in the entities (ie shares or units); or
  • Holds options which would give them that percentage of interest if the options were exercised.

Associates are a person’s spouse, parents, lineal descendants (including adopted children), siblings, aunts, uncles, nephews, nieces and grandparents AND all those people for their spouse as well.

Dec12

SURCHARGE STAMP DUTY

Amanda Quin - Monday, December 12, 2016

SURCHARGE STAMP DUTY

Surcharge Stamp Duty is payable on residential property in NSW (at a rate of 4% of the value of the property) – where residential property in NSW is transferred or sold to foreign persons (including foreign trusts and companies). The surcharge duty is payable by the foreign person or entity.

Residential property includes vacant lots of land that are designated for residential purposes AND any land on which there are one or more dwellings (including buildings which are being constructed).

It is payable on all transfers of property, not just on purchases – unless an exemption applies.

There are some exemptions for break-up of marriages, corporate reconstructions, partitions, deceased estates etc.

Normally when a person buys property "off the plan" in NSW, they are granted 12 months to pay stamp duty. However, where a foreign person buys property "off the plan", then the stamp duty must be paid within 3 month of exchange of contracts.

Where a foreign person purchases land jointly with a non-foreign person, then the surcharge duty is only charged on the proportion of the value that relates to the interest which the foreign person bought.

WHO IS A FOREIGN PERSON

FOREIGN PERSONS ARE:

  • Any natural person who is not ordinarily resident in Australia or does not have a right to reside in Australia.
  • Any natural person with only a temporary right to reside in Australia (irrespective of how long that temporary right may be or how long they have lived here).
  • Any natural person holding a permanent visa, who has not been in Australia for at least 200 days during the 12 months prior to the relevant liability date. (NB there are special rules for off the plan though).
  • Any discretionary trust where any foreign person (including foreign companies or foreign trusts) are a potential beneficiary (irrespective of whether any distributions have ever been made to them).
  • Any company or unit trust in which a foreign person (whether natural or otherwise) and the associates of that foreign person (even where the associates are Australian citizens) has at least a 20% interest in the entity. (For example, if your spouse was a UK citizen and if he or she held 5% of the shares in a company and you held 18% of the shares in that company, then because you are an associate of your spouse, then that makes that company a foreign person. Likewise with units trusts).
  • Any company or unit trust in which multiple foreign persons (and the associates of those persons) hold at least a 40% interest.

PEOPLE WHO ARE NOT FOREIGN PERSONS:

  • Australian Citizens, no matter whether they currently reside in Australia or not.
  • Any natural person holding a permanent visa, who has been in Australia for at least 200 days during the 12 months prior to the relevant liability date.
  • Any citizen of New Zealand who entered Australia legally and has resided in Australia for at least 200 days during the 12 months prior to the relevant liability date.
  • Any discretionary trust where none of the potential beneficiaries are foreign persons.

HOW TO MEASURE INTERESTS IN A COMPANY OR UNIT TRUST

A person holds an interest in an entity if that person, either alone or with one or more of their associates:

  • Controls that percentage of the voting power; or
  • Holds interests in that percentage of the issues securities in the entities (ie shares or units); or
  • Holds options which would give them that percentage of interest if the options were exercised.

Associates are a person’s spouse, parents, lineal descendants (including adopted children), siblings, aunts, uncles, nephews, nieces and grandparents AND all those people for their spouse as well.

POSSIBLE REFUND CIRCUMSTANCES

If a person was a foreign person at the time of entering into the contract for sale, but is not a foreign person at the time of completion of the transfer/settlement, it may be possible to apply for a refund of the surcharge duty.

This might occur where a Permanent Resident had only lived in Australia for less than 200 days at the time of signing an off-the-plan contract, but by the time it settled, they had met the 200 days requirement.


Dec02

Mandatory Energy Efficiency ratings for Commercial Office Space

Amanda Quin - Friday, December 02, 2016

As at 1 July 2017, the threshold for reporting energy efficiency ratings pursuant to the Building Energy Efficiency Disclosure Act 2010  will be reduced from 2,000 square metres to 1,000 square metres.

Where the said legislation applies, then a Building Energy Efficiency Certificate (BEEC) needs to be obtained and registered. A BEEC incorporates both a National Australian Built Environment Rating System (NABERS) Energy star rating and a Tenancy Lighting Assessment (TLA) of the relevant area of the building.

Where the BEEC requirements apply, then the BEEC must be registered prior to approaching the market regarding a proposed sale or lease and the Energy star rating must be included in any advertising for the sale or lease or sublease. Therefore if you do need a BEEC for a building, then you need to obtain the BEEC and register it before you advertise the office space for sale or for lease.

This legislation does not apply if:

  • The proposed lease is for less than 12 months;
  • The building is a strata titled building;
  • The occupancy certificate for the building is less than 2 years old; or
  • The building is a mixed use building and the office space is less than 75% of the building’s net lettable area.

 

In addition the disclosure requirements only apply where either:

(a) the office space is owned by a corporation/company; or

(b) where the tenant is a corporation/company (and in this case, only where the tenant or purchaser asks for a BEEC).

That is, this law does not apply to office space that is owned by natural persons and leased or sold to natural persons.

You can also apply for an additional exemption, if you are approached by someone who is seeking to buy or lease the building (as opposed to you as the owner advertising it for sale or for lease).