A few months ago, we reached out and asked our clients to share their view on offshoring and how it influences their decision to work with professional services businesses like ours. We then put together a press release to voice their opinion to the industry releasing the results from the survey via Superfund Wholesale. The below responses were featured in over 15 different publications including Canstar, Cairns Post, Townsville Bulletin, Gold Coast Bulletin, Courier Mail, Daily Telegraph, Herald Sun, NT News, Perth Now and News.com.au.
Together, we were able to spark a much needed debate on offshoring. Raising concerns surrounding disclosure to clients as well as support for government agencies to be more involved through industry regulation.
We would like to thank our clients for taking the time to complete the survey and helping us make a difference to the industry and wider community.
We have summarised key results from the survey in an easy to read infographic. Check it out!
Capital gains withholding, a new threshold
From 1 July 2017, where a foreign resident disposes of Australian real property with a market value of $750,000 or above, the purchaser will be required to withhold 12.5% of the purchase price and pay it to the ATO unless the seller provides a variation (this is referred to as ‘foreign resident capital gains withholding’).
However, Australian resident vendors who dispose of Australian real property with a market value of $750,000 or above will need to apply for a clearance certificate from the ATO to ensure amounts are not withheld from their sale proceeds.
Therefore, all transactions involving real property with a market value of $750,000 or above will need the vendor and purchaser to consider if a clearance certificate is required.
The following is from the ATO’s website:
- Australian resident vendors can avoid the 12.5% withholding by providing one of the following to the purchaser prior to settlement:
- for Australian real property,
The property market, you will probably know that we don’t often comment on residential property. Due to it being such a heterogeneous asset class (the opposite to homogenous) there are pockets performing differently everywhere. However, given that most of us will have some exposure, we have included some observations from SQM Research to update you on the broader market.
Source: SQM Research
Perth and Darwin prices are the only ones showing year on year falls. We recall only 2 years ago being offered apartments in booming Darwin to ‘sell’ to our clients. Our scepticism and avoidance of conflicts of interest kept us well away from that disaster.
Over the month of June, Sydney prices are showing a small decline, though year on year was strong. Melbourne too was a standout, with even bigger gains than Sydney. Hobart off a low base showed strong gains as well.
While we are not local market experts in each suburb,
After a big sell-off in May, (-4.01%) the S&P/ASX200 Accumulation index managed a small gain of 0.17% for the month of June.
That was better though than Global markets, where the MSCI World index (in Aust Dollars) lost 2.54% for the month.
Bond markets sold off during June as interest rates rose, and the A-REIT sector (real-estate trusts) also had a fall, losing 4.51% over the month.
In spite of those falls, stepping back a bit to look at the whole year shows a much brighter picture of returns. The table below looks at the major liquid asset classes over the last ten years.
There are a few notable points here. The one, three and five year returns for Australian and International shares have been very positive overall. Yet, when looking at the 10 year numbers, the returns from those assets are below the Fixed Interest returns. And, when looking at fixed income returns we see that the returns this year have been low,