Monthly Archives: June 2012

Government Must Do More Says First National Burnie

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First National Burnie has reiterated the Real Estate Institute of Tasmania’s call for government action to respond to the nose-diving Tasmanian real estate market.

The State Government plans to increase Stamp Duty fees by four per cent at a time when respected economists and real estate professionals have been calling for reforms that would see Stamp Duty abolished and labour market mobility increased

While mainland states offer additional incentives to first home buyers, on top of the Federal Government grant, and extra incentives to buy newly constructed homes, Lara Giddings’ government seems determined to accelerate Tasmania’s declining market by increasing costs and making moving more difficult for consumers.

Tasmanian first home buyers receive the lowest levels of assistance in Australia and this has contributed to falls in sales volumes of 20 per cent and, consequently, also government revenues from Stamp Duty.

By increasing Stamp Duty in a climate of low confidence, this government is likely to do nothing more than slow the market even further, collect less revenue, and make it harder for Tasmanians, who have lost their jobs, to move to where the jobs are.

The network has been calling for Stamp Duty reform, consistently, for several years. The Federal Government needs to deliver on the pre-GST promise of abolishing stamp duty or Australia’s soft property market will continue to tread water. We need more new housing stock to come onto the market, indirect costs to be reduced, and inefficient taxes such as stamp duty to be abolished – preferably all three!

Without a return to more normal levels of real estate construction and investment, both in Tasmania and the mainland, the rest of the economy just suffers. The wash-through effects of construction, property investment, renovations and home furnishings purchases are what keep retail afloat and people employed.

Posted from 111-113 Wilson Street, Burnie.

Tax Tips to Avoid Slips by Investors

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Property investors who make claims they are not entitled to, can get themselves into deep water with the Tax Office but there are some helpful hints to assist property investors capitalise on their allowable deductions and avoid unwanted interest from the Tax Man.

The ATO monitors property investor claims and often issue warnings or notices of the types of common mistakes made, so investors should at least visit the ATO website.

But, the most common mistakes made by property investors include making claims against:

  • Immediate initial repairs or capital improvements including structural repairs and improvements which are seen more as capital works deductions such as remodeling a bathroom or building a pergola
  • The portion of a loan that is used for both investing and private purposes
  • Inspection of a rental property while on holiday in the area, which is the real purpose, and the inspection only incidental
  • Expenses relating to the private use of a property such as a holiday home
  • A property that is not genuinely available for rent including periods while it is undergoing construction or renovation
  • Borrowing expenses in the first year rather than being spread out over the term of the loan or five years, whichever is the lesser of the two.

The best advice though is to seek the services of a qualified professional such as an accountant or financial advisor when looking at preparing their tax return.

Everyone’s personal financial circumstances are different and the tax implications of the individual property investment strategy may differ, so it is important to discuss it with someone who has the necessary expertise and experience.

It is also a good idea to look at using the services of a respected and qualified property manager, such as those with First National, because they have the requisite forms, processes and systems to effectively manage a property as well as maintain and keep appropriate records for tax and accounting purposes.

Posted from 111-113 Wilson Street, Burnie.