Hamilton Island properties are all leasehold, how does that affect me?
Similar to the likes of Australia’s capital city, Canberra, the title on Hamilton Island is leasehold, with Hamilton Island Enterprises Ltd (HIE) holding a Perpetual Lease over the island from the Queensland Government.
Perpetual leasehold means that when the current lease expires, property owners will have an infinite right to renew the lease. The current Hamilton Island lease is 99 years, with the first lease due to expire on the 31st of March 2078. At the time of the re-signing of the lease in 2078, there will be no real impact on property owners.
As all property purchased on Hamilton Island is by way of a Sublease of the Perpetual Lease (or head lease), considerable savings are offered for investors in relation to stamp duties payable with certain properties, when comparing to freehold title. Furthermore, as Hamilton Island is leasehold, land tax is not applicable.
Major Australian banks accept this form of title when lending to purchase.
I don’t live in Australia but I am interested in purchasing a property for an investment or to use as my own Holiday Home, is that allowed?
As Hamilton Island is an integrated tourist resort, all properties are Foreign Investment Review Board (FIRB) approved, meaning overseas clients can purchase property on Hamilton Island.
Having said that, there is a one-off Government charge called an Additional Foreign Acquirer Duty (AFAD), which attracts a 7% duty payable on the purchase price.
I’ve never been to Hamilton Island, how established is the island?
In addition to being the only island at the edge of the Great Barrier Reef with its own commercial airport offering direct access from Sydney, Melbourne, Brisbane and Cairns, Hamilton Island is also self-sufficient and operates like any small town in Australia might.
Hamilton Island is complete with its own water treatment plant, desalination plant, electricity generators, sewer plant, school, doctors surgery, ambulance and fire station, supermarket, domestic jet airport, ferry terminals, barge services, electricians, mechanics, trade services, painters, all essential services, and the list goes on.
What type of support is provided by Hamilton Island Enterprises (the owners) to ensure the island’s infrastructure and services are kept at a high standard?
Since 2004, Hamilton Island Enterprises (HIE) has invested over $650,000,000 into Hamilton Island’s infrastructure, services and amenities, including qualia, Hamilton Island Yacht Club, the marina, the Dent Island Golf Course and general island facilities.
Their commitment to the island is genuine and sincere and driven by an underlying objective to deliver on their promise of offering all guests a unique island experience.
Do people live on the island or is it only visited by tourists?
With a permanent population of approximately 1,500 residents, Hamilton Island Enterprises (HIE) is committed to the ongoing personal and professional development of the island community.
This permanent population is, made up of HIE staff, contractors and business owners. There are also a number of private residents who enjoy their retirement or semi-retirement and happily call Hamilton Island home.
How accessible is Hamilton Island?
Hamilton Island has its own airport with direct flights from Brisbane, Sydney and Melbourne operated by Jetstar, Virgin Australia and Qantas. Private flights and charters also fly into Hamilton Island Airport regularly, along with locally operated helicopters, light planes and seaplanes.
Also known as the Great Barrier Reef Airport, Hamilton Island Airport is the main air hub for the Whitsunday Islands and Great Barrier Reef and is the launch pad for scenic flights to the reef and magnificent Whitehaven Beach. Hamilton Island Airport is south of the marina, just a convenient five minute trip to/from resort accommodation.
Where can I get legal or financial advice for a property purchase on Hamilton Island?
Our helpful contacts list (available from the Real Estate Office) has a number of banks, lawyers and associated support businesses who we recommend you contact and who will be able to assist you with your legal and financial queries. These recommended contacts are well versed and experienced in the idiosyncrasies of purchasing property on Hamilton Island. Hamilton Island Real Estate is not legally able to assist with any such advice.
What are the typical returns?
Returns on Hamilton Island, like any investment property market, do vary. However, across the board net returns of between 5% and 6% are what we currently see as being the typical range for Holiday Let properties.
When we are making reference to Nett Returns we are calculating: Gross income less Body Corporate (if applicable), rates, utilities (power, water, gas), Property Management, cleaning and buggy costs (if applicable).
What are the outgoings associated with this property?
Typical outgoings are Body Corporate (Strata) fees; rates and taxes (just like most council’s charge), utilities (power, water, gas) as well as Property Management, Bookings, Reservations and cleaning.
As with any investment property, there is also likely to be other outgoings such as repairs, maintenance, insurance, furniture replacement/upgrades etc.
Are there taxes or government charges on the income?
Any income from your investment property is likely to attract Australian Government taxes. You will need to obtain advice on these commitments from a suitably qualified financial adviser/accountant.
Are there any restrictions on owner usage?
When you buy a property on Hamilton Island, you can use the property as much or as little as you like. There are no real restrictions on the owner use of Holiday Let properties.
There are, however, restrictions on owner usage of properties that are only approved/zoned for permanent accommodation.
Also, in the case of properties in the Whitsunday Apartment letting pool, your management agreement allows for 28 days of owner usage per annum. And the bonus here is, you still receive your regular, monthly payment even when you’re staying there.
How does the property management work?
Here on Hamilton Island there are a number of Property Management companies who can manage your property for you. Hamilton Island Holiday Homes is the primary Property Manager on the island and is owned by Hamilton Island Enterprises giving you, the property owner and your guests, many added benefits. You can also choose to use Air BnB or stayz.com and other online property management platforms, if you like.
The beauty of owning an investment property on Hamilton Island is that you can make the choices that are right for you.
What is the buggy situation?
All buggies on Hamilton Island must be approved, registered and have a certificate of safety. All streets and roadways on Hamilton Island are under the same laws as all Australian Government roads, in this case, the Queensland Main Roads.
Hamilton Island has a strict traffic management plan in place to maintain the ambience of a resort environment and has bylaws in place for eligibility to purchase vehicles and drive on island.
Many properties for sale include a buggy and any new purchaser must seek approval for the buggy to be transferred with the purchase.
What are the normal steps in purchasing a property or land?
For all intents and purposes, you are entering into a contract in much the same way as you would on the mainland. In this case, our property sales laws are governed by Queensland Law and all of the same guidelines and laws apply.
However, in this case, as you are buying a sublease, there are a few additional steps required during the contract and sale process. The primary difference is that once your contract is unconditional and ready to settle, the solicitors undertake to have formal approval (consents) of the transaction completed by HIE and The Crown, in this case the Queensland Government. This phase is more a formality, but must be completed, and can take several weeks to be processed.
Other than this, and a few additional clauses to protect all parties, the purchase of property on Hamilton Island is much the same as buying and selling anywhere in Australia.
I want to purchase a property but I don’t want to live on Hamilton Island, is that ok?
Of course it is ok. The lion’s share of our owners don’t live on Hamilton Island. They do, however, come and go as they please. In fact, some our owners live overseas and may not see their property for several years.
Many people considering buying on Hamilton Island feel there are, and will be, many restrictions on what they can or can’t do. While the fact is owning property on Hamilton Island can be more beneficial, profitable and enjoyable than owning property on the mainland or in a city.
Are there high and low seasons on Hamilton Island?
Like all primarily holiday destinations, there are fluctuations in occupancy rates on Hamilton Island. Typically, the low (quieter seasons) are between the end of February through to July, with the exception of course of the Easter holiday period. The higher occupancy (more popular) periods are typically between August and January.
The island is a very popular place for people to get away from the madding crowd and with our airport right alongside, it’s one of the easiest, accessible and more convenient holiday destinations in Australia.
Can I purchase a mooring or berth for my boat?
All of the marina berths are owned by HIE. While these are not available to purchase, HIE does have very affordable rates for long-term clients.
In addition, HIE also has a full hardstand and slipway/travel-lift service on the island with a myriad of marine support businesses at hand including a Chandlery.
For further information, please visit our Marina website.
Are there phone and Wi-Fi services available on the island?
Hamilton Island has phone and wi-fi services on the island with a range of services to properties. In some cases ADSL (cabling) is available to properties, while in others a wi-fi dongle is very well serviced by our on-island communications towers.
Is it possible to buy land and build on the island?
Of course. We often have a range of vacant land available for sale and HIE also, occasionally, offer House & Land packages in conjunction with land owners.
While it may not be as easy as building in a metro area, (with a Bunnings or Mitre 10 just down the road) HIE’s development and construction team are here to assist in any way we can to alleviate as much of the heartache as possible when planning and building your island dream home.
Is it difficult to have renovations done or furniture replaced?
HIE has access to a range of builders and tradespeople who we can introduce you to as required. Often, as is the case in any area you are unfamiliar with, often it’s simply a case of knowing where to turn for assistance and here at HIE we will always do our best to assist in any way we can.
The Real Estate Office has a comprehensive list of available trades and support people who can assist.
The same applies with furnishings – there are several white goods and soft furnishing retailers on the mainland in Airlie Beach and they are regularly servicing the needs of island property owners.
Deliveries are made regularly with a constant flow of barges coming and going from the island throughout the day, 7 days a week.