Australian property tax: how do overseas people apply for Australian tax number

As for value-added tax, in fact, many people don't understand it. If you don't know the concept of value-added tax, then you certainly don't know much about Australian real estate value-added tax. In Australia, value-added tax is not an independent tax, but a branch of income tax. If you don't know this, it will seriously affect the amount of tax you pay.

Definition of real estate value-added tax in Australia

First of all, let's start with the basics, then let's first understand what is the Australian real estate value-added tax and what is its definition. The capital gains and losses of assets are different from the prices at which you buy and sell assets. According to the explanation in the official website of the Australian Taxation Bureau, only the value-added part of assets needs to be taxed. This tax is actually a part of individual IncomeTax, but it is not a separate tax.

When was the property value-added tax implemented in Australia?

The property value-added tax in Australia was actually implemented on September 20th, 1985, so the property bought before this time does not involve the value-added tax. VAT discount starts from1999 September 2 1. You can enjoy a 50% discount on the property sold after one year. It should be noted that overseas people cannot enjoy a 50% discount.

If foreigners buy an investment house after May 8, 20 12, and then keep their status as foreigners until they sell the house, then the asset appreciation generated by selling the house will not enjoy a 50% discount.

When buying Australian real estate, under what circumstances is VAT exempted?

With regard to the value-added tax on Australian real estate, most people know that it is not necessary to pay value-added tax when selling their own houses, but many people don't understand that other real estates also have special applicable rules, such as being heirs. There is no need to pay value-added tax for inheriting real estate-unless the house is sold, the value-added tax will not be paid until the house is sold.

The value-added tax started on September 20th. 1985. If the estate was originally purchased on or before September 1985, the following rules apply:

1. If the house is sold within two years after the death of the owner, the value-added tax will be exempted.

2. If it is sold after two years and meets the following conditions, it will still be exempted from value-added tax:

A. The property is not used for profit, that is, it is not rented;

B the house is the owner's own house of the property heir, and the spouse or other person of the deceased has the right to live here according to the will.

If the deceased owner bought the house after then1September 1985 19, then it is necessary to conduct a strict review to determine whether the house needs to pay VAT when it is sold-all the above conditions must be met. In addition, the property must be the owner-occupied house where the heir lives, and it is not used to generate any income.

Value-added usually constitutes a large part of the income from investing in real estate. Generally speaking, investors need to pay VAT. The regulations on when and how much value-added tax to pay are not straightforward, especially the investment property was originally used as the owner's own house, or the house became the owner's own house after being rented for a period of time. The most fundamental principle is that taxpayers' self-occupied housing is exempt from value-added tax, and a taxpayer can only have one set of self-occupied housing.

The first is the "six-year rule"

When the owner moves to another city or overseas, he rents out his house. Or the owner rents his own house and rents out the house he owns. In this case, self-occupied housing is no longer self-occupied. In this case, the so-called "six-year rule" allows the owner to continue to regard the property as his own house for a maximum of six years.

If the property is rented for a period of time, the owner will move back to live in his own house, and if the house is rented later, it will be recalculated for six years; If the "six-year rule" is violated, that is, the property is rented for more than six years, then the value-added tax can be reduced or exempted within six years.

Second, the special law

In addition to the "six-year rule", there is a special rule, which is applicable to the situation that the owner-occupied house makes a profit for the first time after1August 20, 996. This special rule is related to how to determine the initial value of an attribute. For tax purposes, the value of a house is calculated according to the market value when it was first rented, not according to the actual price when it was first bought.

If the property was originally rented as an investment house and later became the owner's own house during the period when the owner owned the house, then only part of the value-added tax relief of the owner's own house can be enjoyed. If the property was originally used as a rental house, the total value-added will be reduced proportionally when it is finally sold, depending on the length of time that the owner uses the house as his own house.