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markp

Investment property - any tax disadvantage to a permanent resident vs a citizen?

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Hi Everyone. We’re buying an invistment property in Queensland which we’ll negatively gear. My wife is an Australian citizen; I’m a permanent resident. Does anyone know if there are any tax disadvantages to my ownership of the property (as a PR Brit) versus hers (as an AU citizen)? 

Thanks.

Mark

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Are you in Australia?  Citizens and permenant residents are taxed the same in Australia so no.  Not sure if it might be different if you are living overseas or if all overseas residents get taxed the same though.  If you are in Australia there may be other tax advantages to one or other of you owning the property depending on your personal circumstances and it may be worth consulting an accountant about what would be best.


Any fool can criticize, condemn, and complain but it takes character and self control to be understanding and forgiving.

Dale Carnegie – 1888-1955, Author and Lecturer

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Thanks very much! Yes, we’re in Oz so good to know it doesn’t make a difference. Much appreciated. 

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Just be wary of additional taxation, and whether you will be classed as either of a foreign buyer, or a foreign investor.  Me and my wife (she's Australian citizen), just bought a place in NSW, but I was classified as a foreign investor (slightly complicated by the fact i am awaiting my PR, but on the 309 they count the same as PR in some circumstances).  I passed the foreign buyer requirements, as I am sure you would as there is one buyer who is a citizen, but the tax man could deem you as a foreign investor (despite PR).  Seek legal advice as we did, we were advised that there was some ambiguity, so we reassessed and fortunately were able to buy in my wife's name only.  The costs can be an extra 4% of stamp duty (would have been an extra $50k in our case), and zero land tax threshold.  (This only applies for investment properties).

Just look into it to make sure though, as you wouldn't know if you were fouling the law until you (possibly) got a large tax bill.

Dan

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On ‎4‎/‎01‎/‎2018 at 13:57, the1ofspades said:

Just be wary of additional taxation, and whether you will be classed as either of a foreign buyer, or a foreign investor.  Me and my wife (she's Australian citizen), just bought a place in NSW, but I was classified as a foreign investor (slightly complicated by the fact i am awaiting my PR, but on the 309 they count the same as PR in some circumstances).  I passed the foreign buyer requirements, as I am sure you would as there is one buyer who is a citizen, but the tax man could deem you as a foreign investor (despite PR).  Seek legal advice as we did, we were advised that there was some ambiguity, so we reassessed and fortunately were able to buy in my wife's name only.  The costs can be an extra 4% of stamp duty (would have been an extra $50k in our case), and zero land tax threshold.  (This only applies for investment properties).

Just look into it to make sure though, as you wouldn't know if you were fouling the law until you (possibly) got a large tax bill.

Dan

Neither Permanent residents nor persons purchasing a property as joint tenants with their Australian citizen or Permanent Resident Spouse require Foreign Investment Board Approval. It states on their website:-

"Residential Real Estate

Persons that meet certain criteria do not need foreign investment approval before purchasing residential real estate in Australia. This includes:

  • an Australian citizen (regardless of whether they are ordinarily resident in Australia or not);
  • a New Zealand citizen;
  • the holder of an Australian permanent visa; or
  • foreign persons purchasing property as joint tenants with their Australian citizen spouse, New Zealand citizen spouse, or Australian permanent resident spouse.
    • This exemption does not include purchasing property as tenants in common."

 

Note however that even if you are an Australian citizen you aren't automatically resident in Australia for tax purposes. If you're living abroad (unlike markp who is in Australia) you may be taxed at non-resident rates.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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