Archives: Investax FAQs

The goods and services tax (GST) does not apply to residential rents, so Airbnb hosts do not have to pay it. This also means that you can’t get a GST credit for the costs that go along with it. This is applied even if your sales are more than $75,000, which is the GST threshold.

Please check feel free to check out our Tax Consequence guide for Airbnb. 

Starting your investment journey, whether as an employee or a business owner, requires careful consideration of two critical aspects: tax planning and asset protection. These are not just checkboxes on a list; they are foundational pillars that seasoned investors prioritise from the outset. The goal is not merely to accumulate assets but to do so in a way that ensures their longevity and protection.

Asset protection is all about creating a secure environment for your investments. It’s the practice of arranging your assets in a way that minimizes the risk of loss, whether through legal challenges, business debts, or other financial liabilities. The essence of asset protection lies in the foresight to anticipate potential risks and to structure your investments in a way that those risks are mitigated before they can even arise.

Lenders Mortgage Insurance (LMI) is a one-off, non-refundable, and non-transferable premium added to your home loan. It is calculated based on the size of your deposit and the amount you borrow. The larger your contribution to the purchase price of your property, the lower the LMI cost will be. 

Here are some key points about LMI:

• LMI is typically required if you borrow more than 80% of your home’s value.
• The insurance is designed to protect the lender, not the borrower.
• Arranging LMI is not your responsibility; your lender will handle it for you.
• Increasing your deposit can significantly reduce or even eliminate the need for LMI.

The rule that a company must have a public officer doesn’t come from the main company law, which is the Corporations Act 2001. Instead, it’s a tax rule. According to Section 252 of the Income Tax Assessment Act 1936, every company that does business in Australia or makes money from property in Australia needs to have a public officer. This public officer represents the company for all tax-related matters. The company itself, or someone with the proper authority from the company, must appoint this public officer.

a company is not required to have a secretary, but it if it does, then that secretary (or at least one of them if there is more than one secretary) must ordinarily be a resident of Australia. Refer S.204A.

No. At least ONE director has to be resident in Australia. Refer S.201A of the Corporations Act 2001.

A Director ID Number is a unique number given to an existing or intending director who has verified their identity with the Registrar.  It is available via the  Australian Business Registry Services (ABRS) website.

• A director ID is issued to a person forever.
• A person will keep their director ID even if they stop being a company director, change their name or move interstate or overseas.
• Director ID is being introduced to provide traceability of a director’s relationships over time, and across companies, to assist regulators and external administrators to investigate a director’s involvement in what may be repeated unlawful activity, including illegal phoenix activity.
• Both existing and new directors will need to apply.

Tax Benefits of an ABP

Typically, any investment income or capital gains accumulated in a pension account, such as an Account-Based Pension (ABP), are not subject to tax. This means that the returns generated from the assets within the ABP are tax-free.

However, it’s important to understand that there are exceptions. Certain types of income, including taxable contributions and dividends from some private companies, remain taxable even when they are earned through a pension fund.