property investment

Discussion – First Home Loan Deposit Scheme

First Home Loan Deposit Scheme has been in the news since the Coalition won the election. Let us take a deep dive and see what it is and how you can benefit from it.

Disclaimer: information provided in this blog post does not constitute financial advice, please do it at your own risk.

Tl; dr;

  • The scheme is only for individuals who have not bought a property before, or for couple who BOTH have not bought a property before.
  • May work with FHSSS, according to the proposed plan.
  • Up to 10,000 applications per year.
  • No Lender Mortgage Insurance required.
  • Supports low and middle income class.

The scheme

The Coalition government, in the attempt to win the election, rolled out their plan to help low and middle income families to own a house without having 10-20% deposit. According to the plan, eligible applicants only need up to 5% deposit.

The plan allows average Australian to own their house easier, continuing the Australian dream.

The plan commences on 01 January, 2020. You can apply for it here.

What are the benefits

benefits of first home buyer scheme


Multiple benefits are introduced with the scheme, as seen below.

  • Buyer only needs 5% deposit to apply to buy a property as their home.
  • No Lender mortgage insurance applied to properties bought under this scheme.
  • May work with First Home Super Scheme Saver, i.e. if buyer already has 5% of the property value in their super, they may be able to use that to buy the home they want.

An example of a property that can be bought under this scheme.

Property price $600,000
Buyer’s saving $15,000
Super balance $15,000
Saving + super $30,000 (5%)

With the above financial situation, he/she may be able to buy the property. There is no stamp duty since it still eligible for stamp duty exemption.

Disclaimer: there are other fees that can be applied as well, e.g. lodgement fees, PEXA fees, etc.

The catches

the caveat


Of course it doesn’t come free, there are multiple caveats that come with the scheme.

  • Only 10,000 successful applications per year. This is quite reasonable and I don’t think there will be a shortage.
  • Australian citizen only, i.e. PR holders will not benefit from this scheme. Indirectly this reduces the potential applicants amount.
  • If a successful applicant refinances, the benefits will be gone. I.e. they will need to pay LMI once they refinance with less than 20% deposit on the house.
  • Applicants will need to have their annual taxable income less than $125,000; and a couple of less than $200,000 combined taxable income. This should not be a big concern, considering the income threshold is quite high.
  • If applying as a couple, both people will need to be first home buyers.
  • Only supports property that have values up to a threshold, this threshold depends on regions. You can find the full table here.
  • Banks want to charge a higher interest rate on properties under this scheme. More information here.
    • This is understandable. If buyers only have 5% saved up and not 20%, there are chances that they are not as responsible with money. Therefore the risk of defaulting is higher.


There are a lot of benefits for people who can take advantage of the First Home Loan Deposit Scheme. However they will need to be more responsible with their finance so they can keep their home.

Reading the fine print is crucial for families who apply. There can be multiple conditions that you need to know of before signing the contract.

By Tuan Nguyen

free tafe image

Unit review – Make decisions in a legal context

Another course that I completed in Cert IV: Accounting and Bookkeeping is Make decisions in a legal context.

Tl; dr;

The unit concerns about legality of a business. It teaches me about business structures, different kind of laws that apply to business such as employment law, property law, consumer law, etc.

It helps me for structuring my side business, as well as heading to the right direction in terms of keeping the business safe.

The Australian Legal system

legal system


Split into 2 types, Legislation and Common Law, there are 2 sets of laws that define the Legal system.

  • Legislation: bills passed from the Parliament, and are enforced throughout Australia.
  • Common Law: made by Court when there is no relevant law for the case being heard.

Categories of Law:

  • Criminal Law: protects the society from wrong actions.
  • Civil Law: govern private dealings between individuals, e.g. Contract Law, Tort Law and Property Law.

I learned about Negligence a bit deeper than other areas of the law. Basically it is a neglect of the duty of care when it results in recorded damage of another individual.

Also there is mentions about Victorian Civil and Administrative Tribunal (VCAT), which I’m sure I’ll be touching base with them at some point. They are where we go when there are problems with tenants.

Australian Business structures

business structure


There are quite a few business structures that one can consider when deciding to go on a business venture

  • Sole trader:
    • probably the most common type of business out there. It allows an individual to conduct small business transactions and/or collect/pay GST.
    • Can have employees, and operate as a proper business.
    • The bad thing is that all personal assets are exposed to the public. If something bad happens to the business, e.g. bankruptcy, the owner may need to fork out his/her own assets to remedy the damage.
  • Partnership: similar to Sole trader, however the structure involves multiple people in the business.
  • Company:
    • Can be either public or private company. This is the most common structure for companies out there.
    • Can officially raise funds from investors.
    • Proper structure around taxes, and the tax rate is fixed at 30%.
  • Joint ventures
    • Similar to partnership, however, this business structure has a limited time.
    • 2 or more individuals/businesses join together to complete a project, and when the terms are satisfied, the joint venture is over.
  • Franchises
    • A franchisee is an individual that creates a business that operates under an existing system that a franchisor setup.
    • May be easier than creating an individual business, since the system and branding is already done by franchisor.
    • Limitation on how to operate, develop new products
  • Trusts
    • Good tool to protect family/individual assets.
    • Good tool to reduce income taxes paying to the government.
    • Multiple types of trusts that need to be thoroughly researched before creating one.
  • Associations
    • Operating not-for-profit, whose members have decided to give their organisation a formal legal structure.
    • Must have “Incorporated” or “Inc.” after its name.
    • Is a legal entity so an Association is exposed to all laws.
  • Co-operatives

Employment Contract

employment law


There are 2 types of contracts

  • Contract of service:
    • signed between employer and an employee, contains all benefits, terms, wage amount, service description.
    • employer may be vicariously liable for employee’s actions.
    • employer must provide benefits to employees, such as super contribution, annual leave, sick leave, etc.
  • Contract for service:
    • signed between employer and a private contractor, which contains all terms and conditions regarding a particular piece of work.
    • employer is not liable to contractor’s work.
    • employer does not need to provide benefits for contractor, unless specified in the contract.

Property law

property law


This is not limited to real estate assets. “Property” is the right of ownership.

Real property

  • Land, not just the soil, but anything growing on the land; and fixtures on the land, e.g. house, building, etc.
  • Title to land is a person’s right of ownership of the land (it is the title that we transfer when we buy/sell properties)
  • Adverse possession: this is very interesting, if someone occupies a piece of land for over 15 years without any dispute, they may be able to claim possession of the land.

Personal property

  • Choses(things) in possession: something that is tangible, e.g. clothes, equipment, car, etc.
  • Choses(things) in action: something that is intangible, e.g. company shares, intellectual property, etc.


This area was totally new to me. So it was interesting to learn about. There are lots of things to consider when creating a company, as well as knowing about things like adverse possession really opens my eye on property law.

By Tuan Nguyen

house price going up

Discussion – How technology affects housing prices?

Considered to be the largest commodity in the world, real estate has quite a notable exception with an estimated $217 trillion valuation.

Technology, with the emergence of the Internet had greatly impact the whole industry benefiting buyers, sellers, and agents. From the good old day’s basic cold calls, print ads, emails, open house visit, etc., we are now moving to a wide variety of social media sites, virtual apps, IoT devices, chatbots, cloud computing, advanced analytics, and blockchain. Thus, there’s huge room for sales, purchases, and prospects.

Not just that, technology has made it easier to get data on quality via user ratings on certain websites. People doesn’t only look for accessibility, pleasant climates, booming economies, and appealing amenities, but also the quality of nearby amenities.

recent study in the Journal of Urban Economics that uses data from Washington D.C. finds that restaurant quality, as measured by Yelp reviews, impacts property values: A doubling of the number of highly rated restaurants (rating > 3.4) within a mile radius of a home is associated with an 11.5% increase in the home’s value.

Information accessibility through technology thus, opens a wide market landscape with specific variables, thus, affecting housing prices.

As the aforementioned study has shown, housing prices increase in areas with the best amenities as the quality of those amenities becomes well known.

Tl; dr;

Technology plays a major role in making it easier for everyone to share and gather digital information in acquiring homes.It helps buyers getting more-realistic view of the property plus, the quality of amenities available on that certain area. The higher the housing demand on that area, the higher the housing value of the homes located nearby.

The housing industry does affects customer decision at the same time, the market value of homes.

The Ever-changing Housing Industry with Technology

smart home


Traditionally based on three assets, namely land, building and money, the housing sector under the real estate industry has now digital information employed to technologically assess in terms of demographics, government policies, interest rates on certain locations through valuable apps and websites, enabling customers in need of buying or renting homes to deeply monitor housing rates. This is very much useful for the younger generation who will interested in home ownership.

In 2018, CoreLogic together with RTi Research of Norwalk, Conn., conducted an extensive consumer housing sentiment study, combining consumer and property insights. In their findings, potential buyers in the younger millennial demographic have the desire to buy, 40% are extremely or very interested in home ownership.

In fact, 64% say they regularly monitor home values in their local market. However, while, 80% of younger millennials plan to move in the next 4 or 5 years, 73% cite affordability as a barrier to home ownership (far higher than any other age cohort).

“Our consumer research indicates younger millennials want to purchase homes but the majority of them consider affordability a key obstacle,” said Frank Martell, president and CEO of CoreLogic. “Less than half of younger millennials who are currently renting feel confident they will qualify for a mortgage, especially in such a competitive environment.”

Rentals market

In talking about home value, online platforms such as Airbnb claimed that they bring more money to cities in both rental fees and the money that renters spend during their stays.The company also notes that roughly three-quarters of its listings aren’t in traditional tourist neighbourhoods, which means that money is going to communities typically ignored by the hospitality industry. Knowing that the company offers over 5 million properties, in over 85,000 cities across the world, and its market valuation exceeds $30 billion.

There is no further evidence on how they came to that conclusion.

Then on, a working paper has been published centering about the effects of home sharing on house prices and rents, collecting data from 3 sources:

  • consumer-facing information, from Airbnb, about the complete set of Airbnb properties in the U.S. (there are more than 1 million) and the hosts who offer them;
  • zip code–level information, from Zillow, about rental rates and housing prices in the U.S. real estate market; and
  • zip code–level data from the American Community Survey, an ongoing survey by the U.S. Census Bureau, including median household incomes, populations, employment rates, and education levels. We combined these different sources of information in order to study the impact of Airbnb on the housing market.

Investigation results show that in aggregate, the growth in home-sharing through Airbnb contributes to about 1/5 of the average annual increase in U.S. rents and about 1/7 of the average annual increase in U.S. housing prices. By contrast, annual zip code demographic changes and general city trends contribute about 3/4 of the total rent growth and about 3/4 of the total housing price growth.


Technology impact in the housing industry has underlying economics.

Evidences in the aforementioned study about Airbnb show that the platform affects the housing market through the reallocation of housing stock. And by looking at housing vacancies, Airbnb supplies two things: it positively correlates with the share of homes that are vacant for seasonal or recreational use and negatively correlates with the share of homes in the market for long-term rentals.

By Tuan Nguyen

React logo

Technology review – React 16.11

React 16.11 is already here after a month since the release of React 16.10. Let us see what they’ve got.

This version is not even listed in the release list just yet, maybe I’m just early.

Tl; dr;

Not much is happening, there are only 2 updates from the look of it. You can upgrade your code base if you don’t use any of the following experimental features: unstable_createRoot and unstable_createSyncRoot.

Bug fix

A single bug fix is included in React 16.11.

Fix mouseenter handlers from firing twice inside nested React containers.

This could troll developers quite a bit if they encounter this issue. And they will end up writing some hacks to get around it. I am grateful that it is fixed before I even get to experience the headache.

Removal of experimental API in stable build

This does not affect day-to-day development, since unstable_createRoot and unstable_createSyncRoot are just experimental APIs. However, by separating it from the stable build, it helps reducing the size of React 16.11 gzipped by 0.1%.

react size

Source: React github

You can still use these functions in the Experimental channel.

Facebook decided to release a minor version (React 16.11) because of the removal of a feature. Experimental or not, they are an important part of the library, and removing them deserves a big update.


Yet another small blog post. But we’re getting closer and closer to the Concurrent feature, as seen in React Conference 2019.

React logo

Technology review – React 16.10

Minor upgrade of React has come with version 16.10. Let us see what they did comparing to the previous upgrade.

Tl; dr;

React 16.10 comes with a bunch of bug fixes with no new feature added in.

Everything is backward compatible so you can upgrade your code base to React 16.10 with ease.

Bug fixes

React DOM

  • Fix edge case where a hook update wasn’t being memoized.
  • Fix heuristic for determining when to hydrate, so we don’t incorrectly hydrate during an update.
  • Clear additional fiber fields during unmount to save memory.
  • Fix bug with required text fields in Firefox.
  • Prefer instead of inline polyfill, when available.
  • Fix bug when mixing Suspense and error handling.

Most of these bug fixes are very specific, personally I haven’t come across any of these issues. But it is nice to see them fixed. One thing to notice is that there are a lot more issues currently open in the library issue board, and we will have more shipped in the future versions.

Scheduler (Experimental)

  • Improve queue performance by switching its internal data structure to a min binary heap.
  • Use postMessage loop with short intervals instead of attempting to align to frame boundaries with requestAnimationFrame.

The Scheduler is what React uses to optimize the performance of re-rendering the DOM. React team has spent a lot of time optimizing the internal feature to give us a nice performance that we need.


  • Avoid tearing issue when a mutation happens and the previous update is still in progress.

People have been using hooks for quite a while now, and they are useful in many circumstances. We would like to have a stable feature that we can depend on, and fixing bugs is getting us there.


Well this is a small blog post, but the impact of these bug fixes in React 16.10 are huge for the community. It proves that Facebook is still active in React development and it will not go away any time soon.

By Tuan Nguyen

32 bit vs 64 bit

Technology review – 32-bit vs 64-bit OS

An operating system, also known as “OS”, keeps everything together, managing all the hardware and software on your computer.

It communicates with your device’s hardware: from your keyboard, mouse, storage devices, display, and Wi-Fi radio. Plus, OS also has a lot of software like common system services, libraries, and application programming interfaces (APIs). You can directly interact with the operating system through a user interface such as a command line or a graphical user interface (GUI).

When we talk about operating systems, 32-bit and 64-bit operating systems are the most popular choices in the tech market.

The “bit” term there, also known as “binary digit”, denotes about the smallest piece of data in a computer. We already know that a computer only understand binary language (by 0s and 1s), and every bit can have just one binary value, either 0 or 1. A computer stores data in a collection of such bits known as a byte. 8 bits make up a byte, also called an octet.

In computer architecture, 32-bit is capable of transferring 32 bits of data whenever it performs an operation while 64-bit allows computers to process data and memory address by 64 bits.

Generally, the more data that can be processed at once, the faster the system can operate.

Tl; dr;

Most computers made in the 1990s up to early 2000s were 32-bit machines supporting 32-bit OS, but as the need for faster and more efficient data-handling capabilities quickly becomes a necessity, then emerged the 64-bit architecture.

Today, most new processors are based on the 64-bit architecture and support 64-bit OS, they are also backward-compatible with 32-bit operating systems.

Only a few of the computers are still utilizing 32-bit architecture, commonly referred to as x86 systems (in reference to the first 32 bit 286\386\486 systems).

Few of the remaining 32-bit operating systems available on the market today are:

  • Microsoft Windows – include Windows 95, 98, NT, 2000, XP, Vista, and Server;
  • Linux – include Red Hat, Mandrake, and Ubuntu;
  • Solaris – versions 1-10;
  • Mac OS – Classic (84-2001) and OS X; and
  • FreeBSD – versions 1-8.

What are the differences between 32-bit and 64-bit operating systems?

how operating system works

Source: howstuffareworking

In the early 1990’s, majority of desktop and laptop computers work in 32-bit OS (via 32-bit processor). Most of them are based on Intel’s successful IA32 architecture also known as the x86 (286, 386, 486).

The ever increasing requirements came new hardware and software architectures that introduced the 64-bit OS.

64-bit architecture has been used by supercomputers since the 1970s. It is used in RISC (reduced instruction set computing) based workstations and server in the early 1990s.

A program running on a 32-bit OS can easily address 4 gigabytes of memory-recall, 232 is roughly 4.3 billion. While a program, running on a 64-bit OS can address 264, 4 billion times 4 billion bytes – a large number indeed.

When comparing these two OSes, 64-bit OS simply leaves a huge mark.

Compare to 32-bit OS, 64-bit OS increases program performance, offers security protection, and allows you to create 16TB of virtual memory and store 264 computational values. Offering dual-core, six-core, quad-core, and eight-core versions, its multiple cores increase your computer’s processing power, making it run faster. It also helps software programs to operate efficiently.

With 32-bit, the only edge is that it’s compatible with all older devices developed in early 2000 and late 1990. Vendors no longer develop application for 32-bit OS. Due to a lack of market demand, manufacturers do not often offer 32-Bit driver versions for their hardware.


The main difference between 32-bit and 64-bit operating systems is the way they manage memory. 32-bit is limited to a total of 4 GB maximum of system memory while 64-Bit has a limit of 16 Terabytes maximum of system memory allocation. This is vitally important for performance because data in memory is accessed thousands of times faster than from a disk drive. Also, programs load much faster into memory.

By Tuan Nguyen

keyboard on fire

Discussion – Can software damage hardware?

As the present day’s cyber technology innovation is improving, the threat landscape widens as well.

Cyber criminals are constantly finding ingenious ways to tunnel into businesses, schools, government offices, computer users, and IT systems, disrupting services and daily operations.

Several years ago, hackers and malware have shut down nuclear centrifuges in Iran and severely damaged an unnamed steel mill in Germany.

Knowing the advancements we have today, could such incidences be possible enough?

As headlined on an article from a fictional Weekly World News in 2000, reporting that “hackers can now turn your home computer into a bomb and blow your family to smithereens, and do so remotely from thousands of miles away,” it’s quite impossible to happen in reality.

newspaper featuring hackers

Source: WIRED

It’s a yes and a no, theoretically and hypothetically, in fact, such conditions like this are somewhat unrealistic in most machines today.

Considering your definition of damage, it might be possible in some EXTREMES:

  • Making your CPU usage a 100% (over its maximum temperature);
  • Turning your speakers volume to max into then enjoy a lot of your favourite playlists over a few weeks, non-stop;
  • Writing on the USB drive a few hundred million times, making it unusable then; or
  • Researching the drive geometry and issuing the worst possible commands with your HDD Drives. Thus, making it hot very soon and shortening its lifespan.

Obviously, you need a lot of time to damage your computer.

Tl; dr;

Upon answering the question about the software harming your hardware, it’s a battle between a YES and a NO.

As all hardware is driven by software, it is technically possible to destroy your hardware or at least make it inoperable by messing with software. Think about overclocking, wherein, you’re doing changing settings in the BIOS, allowing low access to low level settings. Mess up and voila! Your hardware is gone. Also, there are viruses that could potentially take advantage and would possibly disrupt and destroy your hardware since the system can be modified.

No, in the sense that, software is nothing but a flow of electricity that’s why it cannot damage hardware by itself.

Lastly, a software can damage another software in the hardware that makes it work, but this doesn’t essentially break the hardware.

Is it TRUE that software can damage your hardware? How would that even be possible?

hardware and software


There’s quite a few instances wherein you can definitely say that software can “potentially” harm your hardware.

In theory, numerous incidences might be:

A BIOS Flash.Some motherboards allow you to flash (modify) the BIOS via software from within the OS. Eventually, this opens a backdoor for malware to flash the BIOS to something that will damage the processor.

Overclocking tools. Another one, some motherboards provide overclocking tools, allowing you to change CPU settings from within the OS. Same as the first situation, once a virus takes over that, putting your CPU’s settings to the extreme then BOOM!

Stress-tests and intensive applications. Over-exerting your CPU to its limits could spike temperatures, which can eventually damage it. Of course, the fan in your computers help cool the CPU down, and most CPUs are designed to shut off when they reach a dangerously high temperatures (thermal shutdown).

In such cases, if an attack is possible even in theory, CrowdStrike, a security vendor says YES.

“We can actually set the machine on fire,” said Dmitri Alperovitch, CrowdStrike CTO in a statement.


The exploit requires completely replacing the Mac’s firmware, which controls every aspect of the hardware.

This means that you need to offer a fake Mac firmware update, convincing the user to install it.


A software can potentially damage a hardware unless it’s malicious but for legit software it’s too impossible to happen.

For the German steel mill incident, someone found a way to control the plant’s equipment, preventing people on site from shutting down a blast furnace.

As with Stuxnet, the one about nuclear centrifuges, it didn’t destroy computers – it exploited computers attached to centrifuges, and destroyed them.

It is unlikely to happen that viruses will destroy your computer, but hackers might someday go after the objects connected to it.

By Tuan Nguyen

australian finance

Discussion – What is Luxury Car Tax?

Luxury Car Tax or simply LCT is a tax collected by the Australian Taxation Office (ATO) on cars with a GST-inclusive value above the LCT threshold.

The tax is paid by businesses that sell or import luxury cars (dealers), and also by individuals who import luxury cars, imposed at the rate of 33% on the amount above the luxury car threshold.

Last July 1, 2019, the ATO revised the Luxury Car Tax (LCT) threshold.

The new LCT threshold for the 2019-20 financial year is $67,525 (higher from $66,331 that applied for the 2018-19 financial year). For fuel-efficient vehicles, the LCT threshold for the 2019-20 financial year remains the same at $75,526.

See table below:

LCT threshold

Source: ATO

The indexation factor for the 2019–20 financial year for:

  • fuel-efficient vehicles is 0.987
  • other vehicles is 1.018.

LCT was first introduced by the Howard Administration in the year 2000 alongside the GST and has added more than $5 billion to the government’s coffers in the past 10 years.

The reason why the tax was introduced that’s because as the administration introduced GST in 2000, the broad-based consumption tax replaced a range of other taxes and levies, leading to price reductions for new cars right across the board.

Tl; dr;

cash and car

Source: Car sales Australia

With Luxury Car Tax (LCT), if you will a buy a car with a value that is above the threshold, you’ll pay an extra third on the amount that’s above the threshold. This tax isn’t listed anywhere, because it’s already built into the manufacturer’s retail price.

The threshold is indexed, going up a bit every financial year. For financial year 2019-20, it is now $67,525.

Interestingly, while the LCT threshold for gas guzzlers has risen by almost $10,000 since 2010, the threshold for fuel efficient vehicles has only gone up by $526 (about 0.7%) and the value for all others has gone up $10,345 (over 18%).

How LCT is deducted?

luxury cars

Source: 100 all’ora

Cars retailing at a price higher than $67,525 will incur the LCT, charged at a rate of 33% for the component of the price exceeding the threshold.

That means, a car costing at $70,000 retail would incur tax payable for the excess (the difference between the price and the threshold). That excess ($70,000-$67,525) is $2,475.

The big BUT there is that the Goods and Services Tax (GST) charged for that difference has to be deducted from the GST-inclusive price before calculating the LCT. Otherwise, the consumer will be paying tax on a tax.

Deducting the 10% GST from the excess leaves a taxable sum of $2,250. Dividing by three (or multiplying by 33 per cent – it’s the same thing) results in a charge of $742.50.

That takes the total price of the car to $70,742.50, which the buyer pays. The dealer receives the money from the customer in exchange for the car and forwards the tax amount payable on the car to the federal government.

Does it apply to every vehicle sold in Australia?

LCT doesn’t necessarily apply to all vehicles sold in Australia.

As stated by the ATO, cars manufactured or imported more than 2 years ago, for example, and emergency vehicles are exempted.

Motor homes, camper vans and other goods-carrying vehicles that carry more passengers than goods are exempted as well.

“Green” cars using fuel at a rate of 7.0L/100km or less are also free of LCT up to a ceiling figure.

Basically, any car consuming fuel at 7.0L/100km or lower and priced (currently) above $66,331 and below $75,526 will not incur the tax at all.


Australia is expected to call it quits for the LCT, having negotiations of a free-trade agreement with European Union (EU) to accommodate European prestigious brands such as those from Germany, who insist that the tax actively deters buyers from purchasing their products.

A possible effect to this reform would be the government’s loss of revenue from collecting LCT from each luxury car purchase. That’s why a proposed solution will be promulgated to phase the tax out gradually in order to minimize the impact of lost revenue.

By Tuan Nguyen

australian finance

Discussion – What is GST?

Also known as the “Goods and Services Tax,” GST as Investopedia would define it is a “value-added tax levied on most goods and services sold for domestic consumption.”

The tax is ultimately paid by consumers, which is then remitted to the government by the businesses selling the goods and services.

As a result, GST provides revenue for the government.

In Australia, GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in the country.

GST applies to most businesses in Australia, collecting it for the government whenever they sell products and services and pay this revenue to the Australian Taxation Office (ATO).

In return, the government distributes this money to its states and territories to finance public services and infrastructure, such as hospitals, roads and public schools.

Most basic foods, some education courses, and some medical, health and care products are exempt from GST.

GST was introduced on July 1, 2000, replacing a range of existing state and federal taxes, duties and levies.

Tl; dr;

GST or Goods and Services Tax is an indirect tax payable by the suppliers of certain goods and services.

Business owners registered to pay GST initially need to assess whether their goods and services are taxable, because they cannot charge their consumers this type of tax if their goods and services are GST-free or input-taxed.

They can charge their consumers GST by adding a 10% flat fee on top of the price they charge for their goods and services.

GST: How it works?

how GST works

Source: ATO

The GST system, as how the Commonwealth of Australia executes it, “operates at each step of the manufacturing, wholesale and retail process, with each participant ultimately collecting a portion of the total GST during their specific transaction and remitting it to the ATO. Total GST collected is made available to the Federal Government to apportion amongst the States and Territories in line with specific agreements.”

 Use the GST calculator on the MoneySmart website to work out how much GST to include in your prices.

Who needs to pay this tax?

GST is payable by the suppliers of certain goods and services. You will need to register for GST if:

  • Your business or enterprise has a GST turnover of AU$75,000 or more.
  • You’re a non-profit organization and have a business turnover of at least $150,000 per year or more.
  • You provide taxi travel or limousine travel services (including ride-sourcing) as part of your business, regardless of your GST turnover. (This rule also applies to both taxi owner drivers and people who just rent a taxi.)
  • You want to claim fuel tax credits for your business or enterprise.

Note: It is optional to register for GST if you don’t fit into one of these categories. However, if you choose to register, you must stay registered for at least 12 months.

For those overseas businesses selling imported services or digital products to Australian consumers and make over AU$75,000. Better consider registering for GST.

This includes:

  • Digital products (i.e. streaming or downloading of movies, apps, games and e-books).
  • Imported services such as architectural or legal services.

As of July 1, 2018, there’s a need to register for GST if you’re an overseas business making over AU$75,000 and sell low value imported goods to Australian consumers. This will affect goods valued at AU$1000 or less on items like:

  • Clothing;
  • Cosmetics;
  • Books; and
  • Electrical appliances.

How to register for GST?

If you qualify to one of the above criteria, you are required to register for GST.

 Step 1:

To register for GST, you will need an Australian Business Number (ABN).

Once you have an ABN, you can register for GST:

Step 2: Once your business is registered for GST, you are required to pay GST on all goods and services you provide unless they are GST-free or input-taxed.

You can pass on the cost of GST by:

Note: Businesses that charge GST must send the GST amount to the Australian Taxation Office (ATO). You may be required to transfer the GST amount to the ATO monthly, quarterly or annually depending on your business’s GST turnover.

If you have customer overseas, you do not have to charge your customers GST because export products are generally GST-free. However, you can still claim for a refund for the GST you paid for any input materials purchased.Nonetheless, you will still need to pay for GST in some circumstances.

Step 3: After the end of each business quarter, you need to complete a Business Activity Statement (BAS) and lodge it with the ATO.

In your BAS, you need to report the amount you have collected from your consumers as GST and pay the equivalent amount to the ATO.

Note: You can lodge your BAS online, by mail or over the phone (if you have a nil lodge), and pay online, by mail or in person at an Australia Post outlet.


For more inquiries regarding GST, you can visit the ATO website about GST and excise concessions for small businesses.

For checklists on assessing your GST compliance and risk management processes, download the ATO’s GST Governance and Risk Management Guide.

Learn more about registering for GST, including helpful videos, on the ATO website.

For more personal advice about your business and tax, consult your accountant.

By Tuan Nguyen

Discussion – Peer to peer lending platforms

Peer-to-peer (P2P) lending platforms is now growing in popularity. They are online investing platforms that match people or companies looking to lend and borrow allowing them to make direct arrangements between one another.

Providing intermediary services, these platforms perform the relevant due diligence risk assessments and credit checks that often include with fee charges for their services but are not part of the final lending agreement.

Some notable P2P lending platforms in Australia are RateSetters, MoneyPlace, SocietyOne, etc.

Tl; dr;

P2P lending system websites connect borrowers directly to investors (lenders), setting the rates, terms, conditions and enables the transaction. People use P2P lending services for a variety of reasons, such as for auto loans, home renovations, debt consolidation, small business loans, and many more.

These platforms are far better than what they can get from credit cards or personal loans from traditional banks.

The system and benefits of P2P lending platforms

peer to peer lending principle

Source: Finextra

A form of direct lending of money to individuals or businesses, peer-to-peer (P2P) lending also called person-to-person lending or social lending has no official financial institution involved in participating as an intermediary in the deal, matching lenders (investors) with potential borrowers.This lending system is generally done through online platform that match lenders with potential borrowers.

One benefit about P2P lending is that borrowers can get loan offers from lending websites at better interest rates compare to traditional banks with overhead costs since peer-to-peer lending companies generally operate online.

Investors get to see and select exactly which loans they want to fund.

Offering both secured and unsecured loans, most of the loans in P2P lending are unsecured personal loans. Secured loans are rare for the industry and are usually backed with luxury goods.

The following are the general steps in P2P lending process:

  • First, a potential borrower obtaining a loan needs to complete an online application on the peer-to-peer lending website.
  • Second, the lending platform assesses the application and determines the risk and credit rating of the applicant. The applicant is eventually assigned with the appropriate interest rates.
  • Third, once the application is approved, the applicant receives the available options from the investors based on his/her credit rating and assigned interest rates.
  • Fourth, the applicant can now evaluate the suggested options available and choosing one of them.

Lastly, the applicant is deemed responsible to pay periodic (typically monthly) interest payments and repaying the principal amount once it reached maturity.

Benefits and fallbacks

Some benefits of P2P lending are:

  • Higher returns to the investors relative to other types of investments.
  • For both lenders and borrowers,P2P platforms are more agile, efficient and transparent to deal with than traditional banking institutions.
  • Great option to diversify the investment portfolio of the investors much less likely to be affected by economic turbulence.
  • More accessible source of funding for some borrowers than conventional loans provided by financial institutions.
  • P2P loans have lower interest rates for borrowers due to competition between lender with lower origination fees.
  • P2P platforms offer high level of security for lender’s investment.
  • Lenders can withdraw their funds anytime.
  • P2P platforms offer greater chance of making an ethical investment.

Risks can be:

  • A lender should be aware of the default probability of his/her counter party, given the fact that most borrowers who apply for P2P loans possess low credit ratings that do not allow them to obtain a conventional loan from a bank.
  • Government protection isn’t included for lenders in case of the borrower’s default.
  • Peer-to-peer lending may not be available to some borrowers or lenders.


Peer-to-peer lending is a unique platform for borrowers and lenders, providing both with alternative options to traditional banks and building societies. Though it has its strengths and weakness, P2P lending is gaining traction and seems certain to become more popular in several countries such as China, Japan, Italy, and the Netherlands.

By Tuan Nguyen