I'm thinking of investing in Australia. Does ayone have any advice as to how to go about it, websites etc and any Tax, Legal and Finance advice pertaining to that location and indeed, I'd welcome any recommendations as to location to buy. Thanks for any advice John

Hi John, I have just purchased an investment property in the Brisbane CBD with a view to diversifying a heavily Baltic States weighted portfolio. I will be working in Australia for the next few years. The Australian state capitals are at very different points in the property cycle: The Eastern States are just emerging from a prolonged correction during which some areas have seen falls of 10-15% in real terms (inner city Sydney and Melbourne). Perth has enjoyed 100-150% capital gains over the past 3 years with meteoric 50% gains in the last year. This is mainly a direct result of the commodities boom but also an initially undervalued housing stock. Regional Queensland has seen significant gains over the same period for broadly the same reasons. Australian investors are beginning to return to the Eastern States market although the Perth market is cooling significantly (it will soon eclipse Sydney as the most expensive real estate in Australia and is not seen as a good investment at present). To my mind, Brisbane seems to be well placed with very high inward migration, a resource rich hinterland and relatively good affordability. Rental yields are between 5% and 6% and are increasing weekly in the CBD. Land is limited in the CBD, especially on the waterfront and there is a trend towards smaller household inner city living. I think the Queensland economy will continue to benefit from the Asian-Pacific economic boom and represents better prospects than a UK holding at present. Non-residents can generally only borrow up to 80% LTV but this is negotiable depending on your situation (I have been offerd 90% as can demonstrate that I will be working in the country for a few years). There are strict rules with regard to the type of property foreigners can purchase. These are governed by the Foreign Investment Review Board (FIRB). Basically, you are limited to new builds and off-plan direct from the developer. While this works well in a rising market, you have to look carefully for well placed developments. You can also buy land as long as you build on it within one year and the building costs comprise at least half the cost of the entire purchase. Existing housing stock can only be bought by permanent residents/ citizens or by temporary residents looking to use the property solely as their home. Temporary residents are expected to sell such a property on leaving the country and are not permitted to rent it out. This does not apply to new builds/ off plan purchases (see the FIRB website). Australian taxation is very well set up to the advantage of the property investor. No capital gains will be paid on the sale of the property if you live in it as your main residence for at least one year. This applies to capital gains over the ensuing six years even if you rent the property out. Numerous costs/ depreciation can be offset against losses such that many Australian use negative gearing on an investment property to reduce their income tax liabilities to zero. This is not so relevant to the UK investor as you will be liable to UK taxation (there is a Double Taxation Treaty). I have renounced my UK tax residency status for this reason. Websites: www.realestate.com.au www.ato.gov.au www.firb.gov.au I hope that this has been useful and would very much welcome discussion from any more experienced investors! All the best, Nic

PS It's summer over here! Nic

Hi Nic, Thanks for all the info The weather comment wasn't helpful and probably served to speed up any move I'm considering If I come across anything further I'll give you a shout. Thanks and Regards John