Brisbane to outshine Sydney and Melbourne dwelling prices in 2020: Westpac

Brisbane to Outshine Sydney and Melbourne dwelling prices in 2020: Westpac

Brisbane dwelling prices will outperform those in Sydney and Melbourne in 2020, according to Westpac.

They believe the Queensland capital will see eight per cent increases next year, above the six forecasted for the two major capital city markets.

Westpac suggest the strong momentum in Sydney and Melbourne will fade as affordability issues re-emerge and population slows.

Brisbane is well positioned due to its affordability and population inflows.

“Momentum heading into 2020 is clearly positive, albeit uneven across markets,” Westpac advised.

They said in the near term, the main guidance comes from current price momentum, auction markets, listings and their buyer sentiment measures.

“Nationally, these are all showing positive prospects for early 2020 with price growth accelerating, auction clearance rates riding high in Sydney and Melbourne, listings showing a clear tightening and a positive pulse from buyer sentiment pointing to a further lift in demand.

“The cyclical momentum is strongest in Sydney and Melbourne but is also showing a notable pick up in Brisbane. Adelaide and Hobart are seeing a more muted lift with Perth yet to pull out of its multi year price decline.

Dwelling Prices: Actual and Forecast

Average*201720182019e2020fComments
Sydney5.13.2-8.94.1+6Strong Momentum fades as affordability issues re-emerge, population slows
Melbourne4.310.2-7.04.2+6Strong Momentum fades as affordability issues re-emerge, population flows
Brisbane0.91.80.21.0+8Gathering pace, well-placed in terms of affordability and likely population inflow
Perth-1.5-1.7-4.7-6.8-0.5Closer to stabilizing but missing population & economic supports for recovery
Adelaide1.52.51.3-0.5+2Stable with some policy support but lacking economic drivers for stronger upturn
Hobart3.311.98.73.1+5Market remains very light meaning any lift in demand quick to stake price growth
Australia3.44.3-6.42.4+5Resurgence becoming more evenly balanced across markets

All dwellings, Australia is five major capital cities combined measure; *10yr average
Source: CoreLogic, Westpac Economics

They predict a number of factors to shape residential property over 2020.

“The first is policy – we expect the RBA to cut rates by another 25bps at its February meeting and to turn to so-called unconventional policy measures to provide additional stimulus,” Westpac advise.

The second factor is supply, both in the form of sellers returning to the market and the physical supply of new dwellings. New listings fell to extreme lows in 2019.

“Our analysis suggests the listing cycle tends to follow the sales cycle by about six months. A likely lift in new listings will test the depth of demand in the first half of 2020. The supply of newly built dwellings will also remain elevated. Completions eased back from a record 218k in 2018 to an estimated 205k in 2019.

“Our projections have this easing to around 175k in 2020, still well above average pre-boom levels with about 50k of that high rise dwellings. New supply could prove difficult to absorb and will weigh on prices and rents in some segments – Sydney’s rental vacancy rate and Melbourne’s stock of unsold units being key areas to watch.

Westpac believe would-be buyers in Sydney and Melbourne will be priced out of the markets and will seek more affordable markets if the current price resurgence continues, which will slow growth.

“As 2020 unfolds we expect another dynamic to come to the fore around affordability and population flows.

“Despite the price correction in 2017-18 and a further lowering in interest rates, affordability remains relatively stretched in Sydney and Melbourne.

“The resurgence in prices see these markets run into the same affordability constraints that emerged in 2016-17 as prices near previous peaks.

“Investor activity will lift as low deposit rates and equity volatility drive more interest in real estate but funding is likely to remain a constraint on investors.”

Real Property Gains Tax (RPGT)

Real Property Gains Tax (RPGT)

A. DETERMINATION OF ACQUISITION PRICE FOR DISPOSAL OF REAL PROPERTY ACQUIRED PRIOR TO 1 JANUARY 2013

Existing Legislation
Effective from 1 January 2019, in the case of a disposal of real property acquired prior to 1 January 2000, the acquisition price of such real property for the purpose of determining the chargeable gain subject to Real Property Gains Tax shall be the market value of the real property as at 1 January 2000. The disposer must be a Malaysian citizen or permanent resident.

Proposed Legislation
It is proposed that the determination of market value as of 1 January 2000 as the acquisition price for the disposal of real properties acquired before year 2000 be amended to the market value as of 1 January 2013 as the acquisition price for the disposal of real properties acquired prior to year 2013 for the purpose of Real Property Gains Tax computation.

Reference
Schedule 2 and 3 of the Real Property Gains Tax Act 1976.

Effective Date
For the disposal of real properties from 12 October 2019.

Likely Tax effects and Implications
In consideration of the public’s view, the Government has introduced this measure to reduce the Real Property Gains Tax exposure on the disposal of real properties by Malaysian citizens and permanent residents after 5 years from the date of acquisition.

B. RETENTION SUM BY ACQUIRED FOR DISPOSAL OF CHARGEABLE ASSET BY A COMPANY NOT INCORPORATED IN MALAYSIA

Existing Legislation
Presently, where the disposer of chargeable assets (i.e. real property or shares in a real property company) is not a Malaysian citizen and not a permanent resident, and the consideration for the disposal consists wholly or partly of money, the acquirer is required to withhold either the whole of that money or a sum not exceeding 7% of the total value of the consideration, whichever is lower, and remit the sum withheld to the Inland Revenue Board (IRB) within 60 days after the date of disposal.

Proposed Legislation
It is proposed that the above requirement be extended to the disposal of a chargeable asset by a company not incorporated in Malaysia.

Reference
Section 21B (1A) of the Real Property Gains Tax Act 1976.

Effective Date
Upon coming into operation of the Finance Act 2019.

Likely Tax Effects and Implications
This amendment would require the acquirer to withhold and remit a sum not exceeding 7% of the consideration relating to the disposal of a chargeable asset by a company not incorporated in Malaysia.

C. CHANGES IN REAL PROPERTY GAINS TAX RATES APPLICABLE TO DISPOSAL OF CHARGEABLE ASSET BY A COMPANY NOT INCORPORATED IN MALAYSIA AND A TRUSTEE OF A TRUST

Existing Legislation
Presently, gains from the disposal of chargeable assets (i.e. real property or shares in a real property company) are taxed under the Real Property Gains Tax Act 1976. The current effective Real Property Gains Tax rates range from 5% to 30%, depending on who the disposer is and the holding period of the chargeable asset, and they are as follows:

Date of DisposalReal Property Gains Tax Rates
CompaniesIndividual (Citizen / Permanent Resident)Individual (Non-Citizen / Non-Permanent Resident)
Within 3 years from date of acquisition30%30%30%
In the 4th year20%20%30%
In the 5th year15%15%30%
In the 6th year and subsequent years10%5%10%

Proposed Legislation
It is proposed that the Real Property Gains Tax rates affecting the disposal of chargeable assets by a company not incorporated in Malaysia and a trustee of a trust be revised as follows:

Date of DisposalReal Property Gains Tax Rates
Companies Incorporated in Malaysia or a Trustee of a trustIndividual (Citizen / Permanent Resident)Individual (Non-Citizen / Non-Permanent Resident) or a Company Not Incorporated in Malaysia
Within 3 years from date of acquisition30%30%30%
In the 4th year20%20%30%
In the 5th year15%15%30%
In the 6th year and subsequent years10%5%10%

Reference
Part II AND III of Schedule 5 of the Real Property Gains Tax Act 1976.

Effective Date
Upon coming into operation of the Finance Act 2019.

Likely Tax Effects and Implications
This amendment seeks to change the Real Property Gains Tax rates applicable to gains on disposal of chargeable assets by a company not incorporated in Malaysia and a trustee of a trust.

 

2020 Review of Income Tax Rates and Income Tax Structure

Review of Income Tax Rates and Income Tax Structure

Existing Legislation
Presently, the income tax for resident individual taxpayer is calculated based on scale rates ranging from 0% to 28% with the maximum rate of 28% being applicable to the chargeable income band of RM1,000,000 and above.

For non-resident individual taxpayer, the income tax rate is at 28%.

Proposed Legislation
It is proposed that chargeable income band exceeding RM 2,000,000 be introduced and the tax rate for resident individual taxpayer for chargeable income exceeding RM2,000,000 be increased by 2% as follows:

Chargeable Income (RM)Existing Rates (%)Proposed Rates (%)Increase (%)
0 – 5,00000
5,001 – 20,00011
20,001 – 35,00033
35,001 – 50,00088
50,001 – 70,0001414
70,001 – 100,0002121
100,001 – 250,0002424
250,001 – 400,00024.524.5
400,001 – 600,0002525
600,001 – 1,000,0002626
1,000,001 – 2,000,0002828
Above 2,000,00028302

It is proposed that non-resident individual taxpayer’s income tax rate be increased by 2% from 28% to 30%.

Reference
Schedule 1 Part 1 Paragraphs 1 and 1A of the Income Tax Act 1967.

Effective Date
From year of assessment 2020.

Likely Tax Effects and Implications

  1. The Monthly Tax Deduction (MTD) table applicable to tax deductions in 2020 will have to be revised by the tax authorities to take into account the increase and change in the structure in income tax rates.
  2. The proposed resident tax rates are tabulated as below:
Chargeable income bracketsPresent tax rate

(%)

Proposed tax rate

(%)

Present tax payable

(RM)

Proposed tax payable

(RM)

(RM)
On the first

On the next

5,000

5,000

0

1

0

1

0

50

0

50

On the first

On the next

10,000

10,000

1150

100

50

100

On the first

On the next

20,000

15,000

33150

450

150

450

On the first

On the next

35,000

15,000

88600

1,200

600

1,200

On the first

On the next

50,000

20,000

14141,800

2,800

1,800

2,800

On the first

On the next

70,000

30,000

21214,600

6,300

4,600

6,300

On the first

On the next

100,000

150,000

242410,900

36,000

10,900

36,000

On the first

On the next

250,000

150,000

24.524.546,900

36,750

46,900

36,750

On the first

Exceeding

400,000

200,000

252583,650

50,000

83,650

50,000

On the first

Exceeding

600,000

400,000

2626133,650

104,000

133,650

104,000

On the first

Exceeding

1,000,000

1,000,000

2828237,650

280,000

237,650

280,000

On the first

Exceeding

2,000,000

2,000,000

2830517,650517,650

Business Migration and Investment Visa Pathways for All Countries

AUSTRALIA

Business Migration and Investment Visa Pathways for Australia
ProvisionalPermanent
VISA ClassBusiness Innovation

188 (A)

Investor Stream

188 (B)

Significant Investor Stream 188 (C)Business Talent Visa

132 (A)

Net AssetsAUD$800kAUD$2.25mAUD$5mAUD$1.5m (at least AUD$400k in business assets
Proof: Source of Funds2 years2 fiscal yearsYes2 years
Business TurnoverAUD$500k for at least 2 of the last 4 fiscal yearsNANAAUD$ 3m for at least 2 of the last 4 fiscal years
Company Ownership≥ 30%NANA10% (if PLC) or ≥ 30%
Amount of InvestmentAUD$200kAUD$1.5m for 4 years

(Government Bonds)

AUD$5m for 4 years

(Fund Management)

AUD$1m or AUD$1.5m for land development
Length of VISA4 years provisional visa4 years provisional visa4 years provisional visa5 years

(renewable)

Getting PRApply for 888 after running a successful business for 2 yearsApply for 888 after bond matures in 4 yearsApply for 888 after maintaining investment fund for 4 yearsNA
Minimum Required Stay1 out of 2 years2 out of 4 years40 days each year for 4 yearsNA
Other Requirements
Age Limit55 years old*55 years old*No age limit55 years old*
Managerial Experience2 years minimum2 years minimumNA2 years minimum
Points Test65 points65 pointsNANA
English TestIELTS 4.5*IELTS 4.5*NAIELTS 4.5*
Investment OptionsFinancial Planning (600k)

Medical Services

F&B (300k)

Government BondFund ManagementFinancial Planning

Medical Services

Land Development

*Can be waived subject to conditions

Visa Information on: BUSINESS VISA AS IN AUSTRALIA >> Read More

2019 – 2020 新财年移民配额变化 2019-2020 Migration Program Planning Levels >> Read More

CANADA

Business Migration and Investment Visa Pathways for Canada
VISA ClassEntrepreneurInvestor
Net AssetsCAD$600kCAD$2.0m
Proof: Source of FundsYesYes
Business TurnoverNANA
Amount of InvestmentCAD$150kOption1: CAD$1.2m for 5 years with no interest

Option 2: CAD$330k paid to bank

Length of VISA2 years work visa5 years PR (renewable)
Getting PRApply for PR after 1 year of businessNA
Minimum Required Stay1 out of 2 years2 out of 5 years
Other Requirements
Age LimitNANA
Managerial Experience3 or 5 years2 years
Points TestTBCTBC
English TestCLB 5CLB 5

 

USA

Business Migration and Investment Visa Pathways for USA
VISA ClassEB-5
Net AssetsUSD$1m
Proof: Source of Funds7 years
Business TurnoverNA
Amount of InvestmentUSD$500k for 5 years minimum
Length of VISA2 years conditional green card
Getting PRRemove conditions
Minimum Required StayVisit once every six months
Other Requirements
Age LimitNA
Managerial ExperienceNA
Points TestNA
English TestNA

 

CYPRUS

Business Migration and Investment Visa Pathways for Cyprus
VISA ClassCitizenship
Net AssetsNA
Proof: Source of FundsNA
Business TurnoverNA
Amount of InvestmentEUR$2m
Length of VISACitizenship
Getting PRNA
Minimum Required StayNA
Other Requirements
Age LimitNA
Managerial ExperienceNA
Points TestNA
English TestNA