Move Your Money Into Property Now

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1 Move Your Money Into Property Now Proposed changes to negative gearing by Labor and to superannuation by the Liberal/National coalition have investors in a spin. In terms of property, the proposed super changes are the lesser of the two evils. But with a promise from Labor that the changes to negative gearing won t be retrospective, the time to act is now. But don t panic, neither proposed policy is yet in effect, there is still time to take advantage of both negative gearing and current superannuation legislation. And this is perhaps why I have put 6 properties under contract in the past 2 weeks, 3 of them in off-market transactions. I have holiday units, duplex apartments and houses from $550,000 through $2.3m available off-market right now, some of whom would be delighted with an exit prior to 30th June. So let me know what you want view, no view, beach, river, 2, 3 or 4 bed investment or owner occupier, simple, sexy or simply sensational. I have something in just about every category! Key changes proposed for superannuation include lowering the contribution caps for all ages, continuing incentives for lower income earners to boost their super and changing the conditions around retirement savings. Some of these measures were announced as being effective immediately, but the majority are expected to be introduced on 1 July 2017, subject to being legislated. And with our current and potential senate, it will be tweaked and tinkered with before being passed, and highly likely the most offending components will be suitably amended. The bottom line is that property has just become an even better investment option. With no interest on savings, with proposed restrictions on contributions to super, it s time to move money into property investments that will deliver significant capital gain and that means buying in a low but rising market. That of course is Noosa! It is equally a good time to sell. Give me a call to discuss your options whether buying or selling.

2 So let s talk about tax The biggest impost on property purchases today is government tax, with the Australian Bureau of Statistics confirming we pay over $45 billion in property taxes each year. Stamp duty is the key component of government taxes on property, and each state has its own version of this out-dated administrative burden. In Queensland, there are two tiers stamp duty that applies to owner occupiers, and that which applies to investors. For an established property, purchase price $800,000 to be used as primary residence, the stamp duty (inclusive of mortgage registration and transfer fee) is ~$24,200. For the same property being purchased as an investment, the total duty is ~$31,350. On a $450,000 property the duty payable by the investor-buyer is ~$15,400, and for the owner occupier it is ~$8,200. At the upper end (>$2m) it can add $100,000+ in duties. While first home buyers in Queensland purchasing properties less than $500,000 in value are exempt from stamp duty, there is a growing chorus calling for a rethink if not a removal of the duties for all buyers, to make purchasing a property more affordable. According to the taxation review, Australia s Future Tax System, Final Report, Part 2, stamp duties can also discourage the development of new housing stock because stamp duties are paid twice in the supply chain of new housing construction: when the developer buys the property from its initial owners and when the final owner buys the land. Stamp duties impose their highest effective tax rate when a property is held for a short period. As a result, they fall heavily on people who hold property over short time periods while it is developed (or redeveloped) into housing. As the liability from a land tax is independent of holding periods, replacing stamp duty would support new housing supply. Investors pay GST on new property purchases, a higher stamp duty, sometimes higher council rates, and where total assessable property values owned in Queensland exceed $1,000,000, land tax too. And they pay capital gains tax on sale. It is estimated that more than 2 million Australians own an investment property worth a total of $1.3 trillion. Two in three investment property owners with taxable incomes of $60,000 to $80,000 claim a negative gearing loss against their investment property, with more than 53% of all investment properties reportedly worth less than $500,000 each. The radical changes to negative gearing promised by Labor should they be elected are predicted to raise $32 billion. But at what cost? CoreLogic (RP Data) data shows that most Australians who own an investment property own just one with an average of 1.28 rental properties per investor. Negative gearing has proved vital for young people and middle income earners to help secure their financial future. Australia s Future Tax System reports changing the taxation of investment properties could have an adverse impact in the short to medium term on the housing market. It states that investment returns in the Australian residential housing market are likely driven by capital gains rather than by rental yield. As such, reducing net rental losses and capital gains tax concessions may in the short term reduce residential property investment. In a market facing supply constraints, these reforms could place further pressure on the availability of affordable rental accommodation within the private rental market. There is a valid fear in the property industry that removing negative gearing will have an immediate and significantly negative impact across the economy, whereas the removal of stamp duty will improve housing affordability and the turnover of stock. But the truth remains the revenue enjoyed by both levels of governments will still have to be found, albeit elsewhere. So the moral of the story is to buy before any changes to negative gearing can be implemented; buy where there remains enormous value, and buy on a rising market. That of course means it is time to buy in Noosa.

3 Featured property s 4 bed 2 bath brick rendered home with two living spaces, double lock up garage and shed, fully fenced. $590,000 Location! Location! In an elevated position of a sought after neighbourhood a short walk to the Noosa River, library and leisure centre, this single level 14 year-old home has an enviable central location and the best position in the street. Two living spaces of generous proportions with an open plan kitchen and alfresco terrace, make this a very comfortable family home. Air-conditioned family room, massive master bedroom with large ensuite and walk-in-robe. In excellent condition, would suit investment with 4.8-5% yield or owner occupier. Put a tenant in until you are ready to move here, you will love the convenience of this position. The garage has a drive through for the storage of trailer or boat, and there is a large shed on slab at the back and it still has room for a pool. Step out the back gate to walk to schools, library, restaurants and more, this home offers tremendous upside potential. While some daytime road noise is evident exterior to the home, it is not an issue inside the home, and there are simple steps that can be taken to diminish it with concrete block fence, hedges and water feature. Properties of this quality for this price do not sit on the market long.

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5 Opportunity Knocking Noosaville $469,000 4 bed 2 bath 2 car 25 Bushlands Drive This single level spacious brick and tile home offers an opportunity to buy into Noosaville at an entry level price. Purchased when built in 2000 by the current owner, this long-time investor is liquidating and wants it sold before June 30th and a potential change of government. A profitable rental at $480 per week (as is), it is the ideal entry level investment property, affordable first home or retiree escape. The house is set back from the road and to the side of the block providing peace and excellent privacy. Fully fenced with double side gate to level yard, there is room for the boat or caravan, and a swimming pool. - 4 bedrooms or 3 plus home office - Generously proportioned lounge room - Light-filled kitchen and family room - New carpet in lounge and all bedrooms - Master bedroom has ensuite A great layout puts the living zone down one side of the house, bedrooms on the other. All rooms have large windows overlooking the easy care garden, with lounge, family and master bedroom enjoying direct access through glass sliding doors. Walk to Noosaville primary school and St Teresa's high school, local general store, bakery and Thai restaurant. There is a bus stop across the road, Civic and Noosa Village shops and Gympie Terrace are just a few minutes drive. Centrally located and surrounded by forested walking/cycling paths, this is a comfortable home in a good area at an affordable price. Be quick! Link