Posted by admin on 10 January 2012
Most of the ‘old heads’ we meet amongst property investors have a calm patience about them. Many owned property during the soaring inflation of the 1970’s, interest rates of 17% and ‘recessions we had to have’ in the 1990’s, and finally the boom times of the 2000’s. Slow to panic in dropping markets, un-tempted by rising valuations, undeterred by a troublesome tenant, they focus on the long term. We’re not saying it’s the only way to approach property investment, but it’s certainly worked for many.
In the early 1990’s one Brisbane property investor and author jolted plenty of us into investing in real estate. Jan Somers, a former Cleveland school-teacher, wrote a best-seller called “Building Wealth Through Investment Property”. Her message? You can’t do nothing and expect to retire on anything more than chicken feed. Compulsory super won’t be enough so invest then be patient. It’s become unfashionable to buy books like that… but the message remains sound.
So as we kick off 2012 will investors return to Brisbane real estate? We’ve seen self-managed super funds nibbling at the offerings and the ATO reports that of the $418 billion held through SMSF’s less than $15 billion of it is currently invested in residential real estate. And $114 billion is sitting in cash deposits. It’s a huge market waiting for the ‘right time’.
What would tempt you to invest in real estate right now? Higher rents? Scrapping capital gains tax? Reduced stamp duties? Or is just not the right time to buy Brisbane real estate?
We’d love you to share your thoughts in a quick survey (5 questions only). Please click through.
Tags: Brisbane Property Management, Brisbane property sales, investment property
Posted in Brisbane landlords, Brisbane's sales market, property taxes and rates etc | No Comments »
Posted by admin on 14 December 2011
Bees Nees team member Rob Honeycombe has been appointed to the board of the Real Estate Institute of Australia. Rob was recently re-elected to his position on the Queensland Institute and has been asked to represent the state as a director with the national body. Queensland’s Pam Bennett was recently elected President of the REIA and the board meets regularly in Canberra.
Rob says it’s an opportunity for Bees Nees clients to have a say. The REIA provides research and well-informed advice to the Federal Government, Opposition, the real estate profession, media and the public on a range of issues affecting the property market.
“There’s plenty of hot topics coming up as we inevitably move to a more national approach to property. The REIA is lobbying for a raft of changes including improvements to the supply chain for housing, and giving first home buyers access to their super. Scrapping state stamp duties might seem like a pie-in-the-sky concept but plenty of positive changes start that way.”
Tags: Real Estate Institute of Australia, Real Estate Institute of Queensland
Posted in property taxes and rates etc | No Comments »
Posted by Rob Honeycombe on 14 June 2011
pic courtesy themorningbulletin.com.au
The announcement is fresh so the details are still sketchy. But here’s the latest news for home buyers from the Queensland State Treasurer and today’s budget:
If you’re buying a home after July 31st you will now pay more stamp duty. For the median Brisbane house of $430,000 it will be $6,575 extra (for a new total of $12,875 going out of your pocket into the government coffers.) Concessions will remain for first home buyers spending less than $500,000, not that there’s many of them left any more. The duty on an investment purchase remains unchanged.
On our best estimates the number of real estate transactions in Brisbane were lower in 2010 than they had been for more than a decade. This year has so far been the slowest in many agents’ memories, well down on 2010, maybe by as much as a further 30%. So how does increasing the tax on each of these make any sense at all? It’s hard to keep an open mind when the mindlessness of it is breathtaking.
Why the change? Well the government seems to be struggling with balancing the books and had to fund some “headline” good news stories. Here’s the explanation from the budget papers: “The government has introduced a temporary $10,000 Queensland Building Boost grant towards the construction or purchase of a new home for six months commencing 1 August 2011. The Community Ambulance Cover levy is to be abolished from 1 July 2011. These changes are to be funded by the removal of the principal place of residence transfer duty concession.”
I must be missing something here. If the Treasurer thinks the new home market operates in isolation of the established housing market he’s badly misguided. Smacking home buyers around the teeth with an extra $6000 or $7000 of tax will further slow the whole real estate market – established and new. So they won’t be handing out too many of those $10,000 cheques for new homes……
Ahhh – I think I understand!
Please share your thoughts on these changes. And to calculate your new tax go to the stamp duty calculator.
## Thursday 16th June update: Some news today from the State Opposition in their budget reply speech:
“Today we also announced our commitment to reintroducing stamp duty concessions on family homes, a saving that was ditched by Labor in the 2011-12 Budget. We understand that this 125 per cent increase will cost Queenslanders dearly, which is why we oppose it. Our policy will save Queenslanders around $7,000 on the average home.”
Tags: Brisbane home buyers, Brisbane home prices, Brisbane real estate, stamp duty Queensland
Posted in property taxes and rates etc | 5 Comments »
Posted by admin on 9 June 2011
Apparently us Queenslanders are worrying ourselves silly that rates are about to leap upwards. So we thought this graph might help allay your fears!
The yellow line shows the current variable rates and it’s encouraging to see the 3 and 5 year rates are not much higher. In fact you can lock your loan in for 5 years from as low as 7.54%. And if you think that’s just the banks being competitive what about a 10 year rate? You’re guessing maybe 12%, 10% if you’re lucky? You can currently lock in your home loan rate for 10 years from 8.09% – or approx 1% more than where variable rates are today.
Hopefully Brisbane home buyers can sleep better tonight!
This info from www.ratecity.com.au and the graph from the mortgage brokers at SmartLine.
Tags: Brisbane real estate, interest rates
Posted in property taxes and rates etc | No Comments »
Posted by Rob Honeycombe on 25 August 2010
The boost to the First Home Owner grant was an important part of the government response to the GFC in 2009 and there’s no doubt it kept that sector of the market moving. The boost finished but the grant remains at $7,000.
During this recent election campaign the Real Estate Institute of Australia was pushing for the grant to be permanently upped to $15,000, noting that a decade’s passed since the amount was set and in that time Australia’s median house prices have jumped from $220,000 to $519,000. So when introduced the grant was 3.2% of a home price and is now 1.5%.
The other idea the Institute has been running is for first home buyers to be able to access their voluntary superannuation (not employer contributed funds) to buy a home.
“The REIA proposes that a scheme be established which would encourage young Australians to contribute to voluntary superannuation by allowing access to these resources for the purposes of raising a deposit for a first home. The scheme would be an adjunct to the First Home Savers Account but would allow flexibility for the saver to decide whether all or part of the voluntary superannuation payments was needed to augment the home purchase.”
We remember visiting pollies in the mid 1990’s as part of an Institute push for policy change for a similar idea back then. Nothing changed and from what we can tell neither of the major parties have had much time for this idea now.
We’re not sure how many buyers would take advantage of it, but to have a great tax vehicle like super as the place to save for your home seems a great idea.
Your thoughts?
Tags: first home owners, First Home Owners Boost, Real Estate Institute of Australia, superannuation
Posted in Brisbane's sales market, property taxes and rates etc | 2 Comments »
Posted by admin on 19 August 2010
We often feel we’re at the pointy end of body corp issues, the time when apartments are put up for sale and the market makes a judgement. There’s no better way of finding out if your body corp fees are too high, your building’s not maintained well enough, the sinking fund’s too low or the AGM and owner relationships are just plain dysfunctional. Buyers can be brutal in their assessment and they’re entitled to be when they’re spending their money. And one issue has been making apartment buyers nervous across Queensland.
We’re delighted to see Fair Trading Minister Peter Lawlor’s move to amend the Act and bring back some predictability to body corp fees. The current Act says lot entitlements must be equal unless you have a good reason and despite knowing the fees when buying in, there’s been a run of apartment owners over recent years going to the Tribunal to ask for a reshuffling of lot entitlements (the numbers used to set your fees). Their own fees have gone down at the expense of their neighbours and in some cases resulted in penthouse owners getting a whopping discount, 1 bedder owners a skyrocketing bill. It made headlines early last year when shots were fired in one Gold Coast building.
The proposed amendments are open for public consultation until September 23rd, and when adopted will lock-in your lot entitlements. Developers will again set interest entitlements according to value of the apartment (as they used to) and we’d expect levies will pretty much follow suit. And importantly the Minister is stopping the ability to move the goalposts later.
Mr Lawlor says, “In the future, the ability to adjust contribution schedule lot entitlements will be limited to all lot owners in a scheme unanimously agreeing to make an adjustment through a resolution without dissent or by unanimous agreement between two or more lot owners to redistribute the lot entitlements for their lots amongst themselves.”
Nice to see some common sense prevailing.
Has your building had its lot entitlements changed? We’d love to hear your experiences.
Tags: Body Corporate and Community Management Act Queensland, body corporate issues Queensland, Brisbane apartments
Posted in Brisbane's sales market, property taxes and rates etc | 3 Comments »
Posted by admin on 18 June 2010
June 30th is almost here and property investors looking for a hand maximizing their refund cheque from Mr Swan might like to take a look at the ATO’s rental property info paper. It’s easy to leave the claims to your accountant but most of this info is easy to follow and one fresh idea might save you some serious dollars.
Many of us get embarrassed admitting we don’t know some of these rules. We say it’s better to ask than make an expensive mistake! Some errors we’ve seen clients make in past years: using the date of settlement of a sale when calculating CGT (it’s usually the date of the contract) or claiming travel expenses where the main purpose of the trip was a holiday (driving past the house on the way to the Port Douglas golf course mightn’t be enough!)
The ever-tricky one seems to be mistaking an improvement for a repair. There’s a ruling on the ATO website that’s worth a read if you love that kind of thing! It says works may go further than being a deductible repair if it “changes the character of the property or does more than restore the efficiency of function”.
And, as always, please talk to an accountant and don’t look to your real estate agent for tax advice!
Tags: Australian Taxation Office, Brisbane rental, capital gains tax, investment property deductions, repairs versus improvements
Posted in Brisbane landlords, property taxes and rates etc | No Comments »
Posted by Rob Honeycombe on 28 May 2010
Amongst the mile of changes to our tax system recommended by the Henry Review, there’s one that many in the property industry have dismissed out of hand. Mr Henry and Co. proposed that land tax should be paid by all property owners.
It’s controversial because it’d be a massive increase on the current land taxes that only apply once you own a minimum value of property (unimproved or UCV – see your rates notice for yours). In Queensland it’s currently $350,000 for company-owned or $600,000 for individuals (approx 2 good Brisbane houses).
But maybe the critics have been too hasty – and hear us out here! Henry suggests a simultaneous scrapping of stamp duties on the transfer of property, arguing this tax leads to inefficient use of our housing stock. A typical inner Brisbane house purchase costs the buyer $22,000 in stamp duty ($15,000 if they’re owner-occupying) and this high cost penalises the changeover of housing. Empty-nesters for example are staying in the 4 bedder long after the kids have left home and the spare bedrooms aren’t been used.
An ABS survey suggests one in six Queenslanders have been in their home for longer than 20 years. They also found 14% of us move to get a bigger place, compared to less than 3% who downsize. Addressing the housing affordability issue, Henry says less hurdles to moving will encourage us to a smaller place. Why not swap the spare bedrooms for a more modern place with other features we want?
The States will rightly be nervous of scrapping stamp duties, with more than 40% of their income coming from property transactions. But a broad land tax would be more predictable and allow better govt budgeting. Of course as real estate agents we love the idea – we’d vote for a mandatory 5 years maximum in your home!
But what do you think? Would you prefer to pay land tax or stamp duty? Please post your comments.
Tags: Australian Bureau of Statistics, Brisbane housing supply, Henry Review of tax, land tax, stamp duty Queensland, Unimproved Capital Valuation Brisbane
Posted in property taxes and rates etc | 4 Comments »
Posted by admin on 9 December 2009
A long day at work after a long week, you stagger in the door, ready for a restful weekend. You open the mail and there’s a letter from Brisbane City Council. Curious, you open it immediately. The bold font screams at you:
“NOTICE OF INTENTION TO COMMENCE PROCEEDINGS AT A MAGISTRATE’S COURT”
The not so friendly letter says you haven’t paid your Council rates on a house in Holland Park, you owe $1025, and you are to appear in Court the following Wednesday to explain yourself.
But here’s the kicker – you don’t live in Holland Park and YOU DON’T OWN A HOUSE IN HOLLAND PARK!
This true story happened to a friend last week. He’s a smart guy and knew it wasn’t his debt to pay. But even he spent a good part of his weekend worrying about his credit rating and how to resolve the issue.
Monday he called BCC. “I don’t own a house in Holland Park”. “No problem”, came the reply, “It will be someone else with the same name. Throw the letter away.”
He rightly requested a letter confirming they’d made an error. Apparently BCC (or their debt collectors) use White Pages and the electoral roll to track non-payers. So, depending on how common your name might be, there’s a chance you’ll get one of these letters sometime too.
Surely with the extensive resources of government Council can save innocent residents from misguided strong-arm tactics like this one?
Got to feel for that bloke named John Smith.
Tags: Brisbane City Council
Posted in property taxes and rates etc | No Comments »
Posted by Rob Honeycombe on 19 November 2009
Putting your place up for sale is about to get harder and will probably cost you more money, thanks to a new state government requirement.
In an “innovative and nation-leading sustainable housing policy” our Minister for Infrastructure and Planning has introduced a mandatory Sustainability Declaration. From January 1st 2010 every seller of a residential dwelling in Queensland will have to fill in a 2 page checklist.
But don’t worry, the Minister says it’s “simple” and “user-friendly”…. Have a look at the draft Sustainability Declaration for yourself.
I had a go at doing one for my house and completed just 13 of 31 questions. I didn’t know if my shower heads were WELS 3 or WELS 4 rated. And I didn’t know what the “R-value” of my ceiling insulation would be either….
To be fair we agree there needs to be a bigger focus on energy use in existing housing. But these questions are going to take sellers some time and create another hurdle to selling.
You won’t be able to advertise your place for sale until you have a Sus Dec and your agents must display it at open homes and advertise to prospective buyers that it’s available. It looks like the penalty for not doing this will be $2000 for you and $10,000 for your agent…. so if you’re thinking of selling after Christmas you might need to read up on this.
We’re guessing that most sellers will pay a building inspector to complete the form, especially in Brisbane’s inner city where many homes are rented and their investor-owners barely know the property.
Will this create a new value and ‘point of difference’ for homes with extra features and bring a higher focus to sustainability? Maybe. But given the time/cost impost on sellers, and the very small percentage that will be fully completed, we’re not sure it’s a worthwhile change at all.
The government is not even going to collect the data. That might have been useful – they could target their campaigns/incentives at getting home owners to upgrade the items that really make a difference.
We’d be interested to hear your comments…
Tags: Brisbane real estate agents, real estate advertising, selling a house Brisbane, selling an apartment Brisbane, Sustainability Declaration Queensland
Posted in Brisbane's sales market, property taxes and rates etc, real estate marketing | 3 Comments »
Most of the ‘old heads’ we meet amongst property investors have a calm patience about them. Many owned property during the soaring inflation of the 1970’s, interest rates of 17% and ‘recessions we had to have’ in the 1990’s, and finally the boom times of the 2000’s. Slow to panic in dropping markets, un-tempted by rising valuations, undeterred by a troublesome tenant, they focus on the long term. We’re not saying it’s the only way to approach property investment, but it’s certainly worked for many.
