If possible, please do this on excel and show the calculations and formulas used.

Both space and asset markets of residential property in Australia were negatively affected by the outbreak of COVID19 as the real economy enters a deep recession.

(1) The JobKeeper program was a temporary wage subsidy where the federal government paid $1,500 per fortnight to badly affected employers to retain staff that could otherwise have been laid off. Explain how this regulation prevented an outright crash of rental yields and asset prices during the COVID period, respectively. Also, please discuss the potential negative impact of the JobKeeper program for the government.

(2) Sarah secured an off-the-plan apartment valued at $260,000 in Melbourne with a 10% deposit. The apartment is scheduled for completion in 3 years. At the time of purchase, the dutiable property value for stamp duty was $30,000, but the stamp duty is not payable until completion. Then she plans to on-sell the apartment when it is completed. However, due to the unforeseen COVID19 pandemic, the value of her purchase falls by 15% upon completion. Selling costs are expected to be 2% of the anticipated selling price. Sarahs marginal tax rate for capital gain is 38.5% and the 50% capital gain tax discount applies.

• Use the stamp duty rate provided, calculate the total holding period return for Sarahs investment if she sells the property at completion.
• What is an alternative choice for Sarah to resolve the failure of her on-selling strategy? Discuss the potential cost of this choice.

Stamp Duty Rates in Victoria for the 2022 Land Tax Year:

Dutiable Value Range: $0 - $25,000

• Rate: 1.4% of the dutiable value of the property

Dutiable Value Range: $25,001 - $130,000

• Rate: $350 plus 2.4% of the dutiable value in excess of $25,000

Dutiable Value Range: $130,001 - $960,000

• Rate: $2,870 plus 6% of the dutiable value in excess of $130,000

Dutiable Value Range: $960,000 - $2,000,000

• Rate: 5.5% of the dutiable value

Dutiable Value Range: More than $2,000,000

• Rate: $110,000 plus 6.5% of the dutiable value in excess of $2,000,000