Tax jump jolts investors
Many had raised serious concerns about the transparency of the Australian investment landscape and were considering alternative investment destinations.
A leading Australian property group has strongly criticised federal government tax changes, arguing they have stopped international investors from putting their money into Australian property.
The government in the budget doubled the withholding tax rate for international managed investment trusts (MIT), from 7.5 per cent to 15 per cent. The measure has since been approved in the Senate, with a concession for new energy efficient buildings.
Peter Frith, managing director of property and development adviser, Napier & Blakeley, said the action, with no consultation or warning, was a huge mistake and was apparently based on misguided thinking. Continue reading
Buyers Beware… Investigate or Reach for your Wallet
In the last year Napier & Blakeley have undertaken more than 100 physical due diligence and capital expenditure forecast exercises with a combined value in excess of $10billion.
It’s rare to find nothing that would be considered problematic for an incoming owner, but the last few years there have been a few issues that have become commonplace through either lack of ongoing investment and maintenance or as a result of new market legislation.
The GFC brought substantial financial constraints to the entire economy but for property owners it brought pressures through loan to value ratios (LVR’s), reductions in value and rental income. This created a catch 22 situation where many knew they had to keep maintaining and spending capital to keep their assets compliant, relevant and therefore rentable, but were unable to directly fund or borrow funds to do so.
We recently re-analysed an asset that we had prepared due diligence and capex forecasts for a few years ago, and the list of items that we identified in our initial report were almost completely the same as now. Nothing had been fixed, maintained or repositioned. So, many years down the track the asset has fallen deeper into redundancy and therefore costs more to rectify. Continue reading
