Learning all about Australian Property Tax

Australia is a country which apart from being a sound nation economically also has a plausible taxation system. The pillar of tax collection in Australia is the Australian Taxation Office. It is a part of the government which collects taxes of all nature from individuals, companies and firms etc. the largest volume of revenue of the government comes taxes of which majority of the revenue is from individual income taxes. These taxes are utilized by the government to pay for public services and transfer payments.

The Australian government apart from the income tax also charges on any gain from transfer of capital assets. This form of tax is known as Capital Gains tax. Capital assets on which taxes are levied consist of all properties. However there are some properties which have been exempted from such tax. The most important of them all is the residential house.

Another form of taxation in Australia is the corporate tax which is levied on all companies. The rate is 30% flat on the income on the corporate level which is about to be distributed amongst the shareholders in the form of dividend. However partnership firms are not required to pay corporate taxes. Only companies having separate entities are liable to pay such tax.

Australian Property tax is also a form of taxation implemented by the Australian government which charges tax on all properties held by the person holding property. Some properties are however disallowed from taxation. Property tax is mainly levied on land or buildings etc.

To charge tax on goods and services, the Australian Taxation Office applies a value added tax system known as the Goods and Services Tax or GST where a fixed percentage of 10% is levied on each level of value addition in a commodity. Or simply put, GST is levied on most goods and services consumed in Australia.

If you decide to purchase a property, know that it can take some time to transfer ownership of the property. 'Settlement' is when the exchange of money and property between the owner and the buyer takes place. So you will need to allow more time before you are able to move into a purchased property. The Foreign Investment Review Board (FIRB) must make a decision on any proposed purchases by non-citizens or non-permanent residents of Australia and the Migration Tax Australia. These decisions can take thirty days. It can be cost prohibitive to purchase property in Australia due to the high cost of Stamp Duty, a non-refundable tax paid by buyers of properties. The tax is based on a percentage of the purchase price of your home so it can become very expensive if you are buying a pricey place to live. If the FIRB requires that you sell your home when you leave Australia, you may want to determine whether it is in your best financial interests to purchase a property for such a short amount of time. If you are planning to stay permanently, this becomes less of an issue.

You may wish to enlist the assistance of a Mortgage Specialist agent if you plan to purchase a property and would like help to get the best deal.