We know that in property there is not much that is sacrilege. Property across Australia is owned by many people from overseas. You could have expected however, that common property would remain in Australia….not so!
In strata schemes there are two types of property:-
- Lot owner property; or
- Common property.
Common property is owned by the Owners Corporation and each owner shares an interest in that common property. The Owners Corporation is set up within Australia, and therefore you expect that all rights, title and interest in it would remain in Australia.
Leverage recently came across a scheme in the telecommunications area. Many of us would be aware that, there are telecommunication aerials on all buildings, whether it be for Vodafone, Telstra or otherwise. The common property is leased to the telecommunications companies for anything up to 20 years.
An American company has decided that this is rich territory. They are well aware that telecommunication businesses require access to buildings to put up their aerials, otherwise they will have blackspots within their network.
What the American company has done is to approach the Owners Corporation and purchase or lease the leased space. What they do is take a right to use that area and the right to lease it to any tenant. Where a telecommunication tower is offering $20,000.00 a year the American corporation will offer $30,000.00 a year. When the lease becomes available for review, the telecommunications company will be paying $40,000.00.
In fact, the right to lease this area of the building moves to the American company. They hold the right to use and lease the area. Yes, they do hire it and the Owners Corporation do end up with more money. Nonetheless, the profits from that are following into America.
The Agent boasted to me that, it is the perfect property plan! We make the money in Australia and transfer it to America thereby being tax free in Australia. Just another example of Australians paying taxes for international corporations to move profits offshore without paying tax.
Once upon a time we were concerned about the United States owning Pine Gap, now they own each roof top in our city.