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Property investors: did you get your tax deduction?

In a recent article by Anthony Keane, he advised that many of Australia’s 2.1 million rental property owners are missing out on thousands of dollars of tax deductions each year by failing to correctly calculate depreciation.

New figures from BMT Tax Depreciation show that since tax time started on July 1, its investor clients have achieved depreciation claims averaging $8893 per property. That’s much more than the latest Australian Taxation Office records showing average annual claims totaling $3600 for capital works (construction costs), plant and equipment as many investors failed to seek adequate advice.

“Thousands of dollars of legitimate tax deductions are being left on the table each year,” he said.

Big ticket items such as ovens and carpets often provided the biggest deductions, but investors should not ignore smaller items worth less than $300 — such as bins and smoke alarms — that could be claimed in full immediately. Capital works deductions were often $5000 in the first year.

Depreciation made owning rental properties more affordable, especially in the early years where there were the most cash flow pressures.

New rules introduced last financial year have taken some of the shine off depreciation deductions, but thousands of dollars can still be claimed by many property investors.

@keanemoney

Originally published as This mistake can cost thousands at tax time

 

Central Coast is emerging as a new House Price Hotspot

Sydney’s prices remain the most expensive in the country by some distance, and this has prompted growing demand for areas outside of the capital as buyers search for affordability.

The Central Coast has been a key target given its proximity allowing residents to work in Sydney, and it’s prices are expected to rise by 3.6% in 2018 and 8% in 2019.

 

from Moody’s Analytics and Corelogic data

 

ATO formalises GST property settlement changes

The government recently decided to make some revisions to the process of paying Goods and Services Tax (GST) when acquiring residential properties.

Although the amount of the tax remains the same, buyers of new homes after 1 July 2018 are expected to take care of remitting their GST payments to the Australian Tax Office (ATO).

The Property Council of Australia Chief Executive Ken Morrison said that this was one of the biggest modifications to the way GST is being collected on property since its introduction twenty years ago.

“Previously, this was done by the developer. The overwhelming majority did the right thing and passed the GST they collected through to the ATO, but this measure has been introduced to deal with the minority who didn’t, through so-called ‘phoenixing’,” shared Morrison.

Affecting 70,000 property transactions a year, the new directive will oblige homebuyers to do extra work in order to guarantee their property’s settlement. Some of these additional steps will include submitting forms to the ATO and separating the GST from the purchase price of the property. 

“People buying property after 1 July should talk to their solicitor or settlement agent to ensure they have the right arrangements in place to meet this new requirement and ensure a smooth settlement process,” Morrison reminded those who wish to buy property.

Morrison added that The Property Council came prepared for the announcement as they had been investing in systems and staff training to aid the introduction of the new process and to minimise disruption or inconvenience to their customers.

For contracts entered before July 1, 2018, transitional agreements are already in place.

Stamp Duty in New South Wales

You can’t be certain of anything in property development; except taxes. It comes in many forms; however, Stamp Duty seems to be a particular cause of confusion and stress for a majority of property purchasers.

In this article, we clear up the clutter so that you may better understand how much tax you are required to pay, how much concession or exemption you may be entitled to and when you are required to pay it.

What is Stamp Duty?

Stamp duty is a tax levied on property purchases. Each state and territory governs its own rates but the amount payable will be determined by the purchase price, location and purpose. Some states charge different rates on investment properties than on places of residence.

New South Wales

A sale or transfer of land, including improvements in NSW will incur a liability known as Transfer Duty (Stamp Duty).

The liability for duty arises, and is payable, from the moment the sale or transfer occurs. However, if the sale or transfer is affected by a written instrument (contract or agreement or transfer), liability arises when the instrument is first executed. Payees need to pay the duty within three months from the date of this liability.

Therefore, if the property is purchased off-the-plan, the transfer duty must be paid within three months from the date of acceptance – normally the signing of the agreement.

EXEMPTION – FIRST HOME BUYER
Purchasers eligible for the First Home Buyers Assistance scheme, may be granted exemptions or concessions on transfer duty. This includes vacant land on which you intend to build your first home.

The First Home Buyers Assistance (FHBA) scheme provides eligible purchasers with exemptions on transfer duty on new and existing homes valued up to $650,000 and concessions on duty for new and existing homes valued between $650,000 and $800,000.

Eligible purchasers buying a vacant block of residential land to build their home on will pay no duty on vacant land valued up to $350,000, and will receive concessions on duty for vacant land valued between $350,000 and $450,000.

 

GREAT NEWS FOR FIRST HOME BUYERS

 

As at 1st July 2017 the New South Wales government has made concessions for First Home Buyers of property purchases.

  • Stamp duty on all homes to a value of $650,000 has been abolished
  • Stamp duty relief has been offered on homes from $650,000 to $800,000
  • There is a $10,000 grant for builders of new homes up to $750,000 – and purchasers of new homes up to $600,000
  • Insurance duty on lenders’ mortgage insurance has been abolished
  • Foreign investors are now required to pay higher duties and land taxes
  • Investors cannot defer paying stamp duty on off-the-plan purchases

For more information, go to https://www.nsw.gov.au/improving-nsw/projects-and-initiatives/first-home-buyers/

 

 

YERAMBA ESTATES HAS BEEN HELPING PEOPLE FOR OVER 50 YEARS

So many families have begun the exciting journey to owning their own new home in a Yeramba Estate. Our new subdivision in Hamlyn Terrace on the Central Coast has introduced a new generation of happy land owners to this adventure.

First Home Owners can achieve their own home amongst the Hamlyn Terrace community. Affordable, well managed land subdivisions created by a reputable company such as Yeramba Estates, eases the concerns and leaves only the pleasure of building and owning a lovely new home. Always there for advice, Yeramba’s experience and knowledge is shared with our clients. As well, Empty Nesters and Upgraders find the Yeramba Estate community is a great investment for the future.

130 subdivisions in 52 years – Yeramba knows, Yeramba cares and our clients keep coming back.

For more information about our latest subdivision Hamlyn Grove, please contact Yeramba Estates on 94115155 or sales@yeramba.com.au

 

Matrix Property Group notes new families moving to Central Coast

 

With housing affordability an ongoing issue in Sydney and median house prices now nudging $1.1m, more young couples and families are choosing to move to the Central Coast to get more “bang for their buck” and for the obvious lifestyle benefits of coastal living.

Many home buyers are simply giving up on Sydney and looking to other markets for a lifestyle change. The Central Coast remains popular due to its easy access to both Sydney and Newcastle for commuters” said Godfrey Franz of Matrix Property Group.

“The Central Coast still offers a range of large, well located land parcels that are sometimes already zoned for residential development,” said Mr Franz.

Please contact Yeramba Estates to be included in our database for more information about our new subdivisions – Land for Sale

Check out our Hamlyn Grove page to see our latest Estate in Hamlyn Terrace

Millennial Househunters lead new rush to the Coast

 

Desperate househunters who cannot afford Sydney’s skyrocketing prices are turning to the Central Coast, where they’re snapping up homes for half the price.

Experts say the lure of the beach is also encouraging millenials – otherwise known as Generation Y – to make the trek north.

“Sydneysiders are being pushed from Sydney by high house prices, but the Central Coast has a lifestyle pull factor,” demographer and social researcher Mark McCrindle said.

“(It’s) now being seen by this next generation – Generation Y – as a place to live, work and raise children, not just to holiday or retire.”

The Central Coast’s median house price is $550,000 – almost half Sydney’s $900,000 figure. ABS data shows the region has had the fourth-largest population growth in the state over the past year.

Central Coast agents say up to 60 per cent of buyers at open homes come from Sydney.

Reproduced in part from article by Jill Stevens of Sunday Telegraph 9.4.2017

Please contact Yeramba Estates to be included in our database for more information about our new subdivision. There will be several larger lots, perfect for investor projects.

Check out our Hamlyn Grove page for more information.