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    What are Management Rights?

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    Find out why this lucrative industry offers ‘lifestyle, security and high returns.'

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    Why use Management Rights Experts before buying or selling?

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    Want an honest and straight forward view of the positives and the negatives?

LOOKING FOR A CHANGE OF LIFESTYLE?

Find out why this lucrative industry, offering ‘lifestyle, security and high returns,’ is a unique business opportunity and how you and your family can secure your future, living a quality lifestyle.

Whilst a Management Rights business can offer attractive lifestyle alternatives, the purchase process can be littered with financial and legal pitfalls; this can be daunting for the first time buyer.

Our team of professionals pride themselves in delivering easy to understand layman term information on the industry. Our monthly seminars not only give you the tools to move forward confidently, they give you the professional team that know the pitfalls and how to save you from them.

Many potential owners are investing their life savings into a purchasing Management Rights businesses; the investment of three hours could be the best investment you will make in protecting and increasing your assets.

These events provide an excellent opportunity to personally approach our representatives and all speakers offer complimentary one-on-one interviews to seminar attendees.

UPCOMING EVENTS:

GOLD COAST SEMINAR SATURDAY 23rd JUNE 2018

Management Rights Australia (MRA) holds regular information seminars throughout the year for people wishing to buy a management rights business.

Join one of our seminars today and let us help guide you through the Management Rights maze. Bookings are essential.

Eventbrite - Management Rights Australia Seminar: June 2018

Will The Vacancy Fee For Foreign Owners Have An Impact On Short Term Management Rights?

Following a series of amendments in November 2017, foreign owners who have applied for FIRB approval after the 9th May 2017 may be liable for a “vacancy fee” where their residential properties are not occupied for at least half a year.

The vacancy fee was introduced by the Federal Government to address domestic housing affordability by encouraging foreign owners to put their properties on the rental market.


 

When does it apply?

Liability under the vacancy fee legislation will be imposed on a foreign person that has obtained FIRB approval on or after 9 May 2017, where the residential property is not residentially occupied for at least 183 days in a “vacancy year”.

Vacancy years will be different for each foreign owner as they are the 12 month period starting on the date the foreign owner has the right to occupy the dwelling (i.e. from settlement of their purchase).
How will it work?

Foreign owners who receive FIRB approval from 9 May 2017 will be required to lodge a vacancy fee tax return with the Commissioner of Taxation within 30 days of the end of each vacancy year.

Although the format of the proposed return has not yet been published and minimal guidance has been provided, ultimately the return should detail the dwellings use during the vacancy year. I would assume that the Australian Taxation Office would publish a copy of the vacancy fee return by May 2018.

If a foreign owner fails to lodge a vacancy fee return, the dwelling is deemed vacant and the owner is liable for approximately $52,500.00 in civil penalties.

Exceptions

Foreign owners of residential properties will not be liable for the vacancy fee where the dwelling is ‘residentially occupied’ for 183 days or more in a vacancy year. Under the new legislation a dwelling will be deemed to be residentially occupied where:
• the foreign person, or a relative of the foreign person, genuinely occupies the dwelling as a residence (whether or not with another person);
• the dwelling is genuinely occupied on that day as a residence under a lease or licence with a term of 30 or more days; or
• the dwelling is genuinely available on that day for occupation as a residence under a lease or licence with a term of 30 or more days.

A dwelling will be considered to be genuinely available for occupation as a residence (with a term of 30 days or more) if the dwelling is:
• made available on the rental market;
• advertised publicly; and
• available at a market rent.

The Explanatory Memorandum to the Bill provides an example of an apartment placed on Airbnb rented for generally less than one week at a time. In that example the apartment was not considered to be genuinely available for occupation as the owner used a web-based short-term stay site and only made the property available for periods of less than 30 days in order to maintain flexibility should the owner wish to use the property during the year.

Impact on short-term letting

Unfortunately, the legislation is not sufficiently clear to give short-term letting agents enough certainty on the question of how to treat short-term letting for offshore owners in the letting pool.

On one reading, so long as there is no advertised maximum term (or the maximum term is at least 30 days) short-term letting is not caught by the legislation. This appears to also cover the purpose of the legislation, as expressed in the Explanatory Memorandum.

An alternative reading is that all terms less than 30 days will be caught, so that even if a guest wished to stay for a longer time, if any guests stay less than 30 days, the legislation will apply.

Conclusion

We have not yet seen how this will work practically in terms of completing the return, because we have not yet seen what the return will look like.

There are also further considerations, including in particular town planning and residential tenancy issues with longer term leases.

This is by no means a simple issue, and it is hugely regrettable that the Government has not thought to consult the management rights industry with this knee jerk legislation. Perhaps the ATO’s interpretation of the legislation will be fair and reasonable ... but I’m happy to discuss odds with anyone who cares to have a wager on that!

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

 

Management Rights Articles

  • SMART QUESTIONS YOU MUST ASK WHEN BUYING A MANAGED RIGHTS BUSINESS

    What is the net profit of the business? How big is the letting pool? How many years are left on the agreements? What is the body corporate remuneration? Is the office on title or is it “Exclusive Rights” over common property etc...?

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