The GST applies to the council tax

Real estate investments "Down Under"

January 15, 2008 | Australia

by Dipl.-Kffr. Birgit Gramsch and Dr. Michael A. Müller, Berlin

Australia - land of koalas and kangaroos - has been very popular with German investors for some time. The Australian real estate market in particular is in demand due to its long-term stable income. In addition, a liberal trade and foreign policy welcomes foreign investors. However, the Australian tax system sometimes seems complex and not very transparent. This article presents the typical fundamentals of real estate investment in Australia.

1. Investment alternatives

There are numerous investment alternatives available to German investors. You can either invest directly from Germany or through an Australian corporation or partnership as well as a unit trust. The Australian corporations and partnerships are comparable to the German legal forms and can be set up inexpensively. With an Australian Unit Trust if a manager gives shares (Units) and acquires assets with the trust assets collected in this way. The assets are the legal property of the trust manager, who keeps them separate from his own assets for the investors.

2. Legal framework

Foreign companies that want to conduct business independently in Australia must in principle register with the Australian supervisory authority ASIC (Australian Securities and Investments Commission) to register. In addition, investments by foreign investors must be approved by the advisory body of the Finance Minister FIRB (Foreign Investment Review Board) if the value of the property or shares in the real estate company exceeds A $ 50 million. As a rule, approval is given. It can sometimes be difficult to obtain a permit for residential properties in urban areas.

Australian tax law is shaped by a juxtaposition of federal, state and local taxes. Federal taxes are levied by the federal government, regardless of the state, territory or municipality in which the natural or legal person is resident. State and county taxes are based on the state, territory, or municipality in which the person resides or the property used. Accordingly, investing in different states can result in different levels of taxation. As the highest financial authority, the ATO (Australian Taxation Office) the administration and supervision of taxation.

3. Taxation on acquisition

Investors pay the Australian sales tax GST (Goods and Services Tax) if there is no business sale as a whole. The tax rate in Australia is a uniform 10%. The acquisition of shares in Australian companies or unit trusts is not subject to sales tax.

Would you like to read this technical article?

Free PIStB trial subscription

0,00 €*

  • Access to the latest specialist articles and the complete archive
  • Lots of work aids, checklists and special editions as downloads
  • Cancel at any time after the test at the end of the month

* Thereafter from € 18.75 per month

  • 24 hour access to all content
  • Ends automatically; no termination necessary
  • A wise decision! Please log in.


Become a fan of the PIStB Facebook page now and receive the latest news from the editorial team.

To Facebook