Forum Replies Created
Sounds like the previous owner knew this was coming, he probably already had offers, and just sold it to get his money rather than taking the councils pathetic hand outs. It sad that they can just "acquire it" at what they think it is worth, especially in a down market. SEQ markets have fall dismally over the last couple of years, and its funny at signs prices are going up in areas (especially areas that are improved by the airport link the new airport link) they want to take it now.
If they want it for infrastructure or reasons pertaining to better the local community, I don't think you stand a chance, you can flail your arms and jump up and down as much as you want, but at the end of the day the movie The Castle, was just that… a movie, when the government wants… it gets.
I don't know if you can claim the land is worth its rated value (the amount you have to pay rates on), but I have a suspicion that that amount would be greater than its current worth, that could go in your favor (depending on the legal side of things). Also I would investigate if you just bought it, about a refund for stamp duty and legal costs in acquiring your property, if you can prove they were already trying to acquire this property before you bought it, then I don't see why they should bare these costs that you have lost…you can only ask, if you don't ask you don't get, most of the time answers to our questions will be no, the harder you argue and make it difficult for them the more you might get.
One bit of advice, just don't act rude or spoilt toward them (telephone conversations, in correspondence etc) as the decision makers are human as well, whilst they follow policies etc, a lot of government policies are vague, open to interpretation and ultimately leave some leeway to the decision maker, if they don't like you or your attitude this leeway may going against you, instead of for you.
You can always try ACA / TT, and I would like to see you win, as it would be a win for every investor, but I really don't like your chances, as with investing, don't let emotions (including your pride) get involved, go on the facts, as your legal fees could end up costing you more than you would have lost if you took their offer.
I have just enlisted "Depreciator" to create my 3rd depreciation schedule for me, they do a fine job as far as I am concerned, some people may think they are expensive, but I have seen cheaper reports, and some of them are just down right useless. I know how to read the ones Depreciator give me so I stick with them.
They have a sample report on their web page you can look at, I have used 3 times now over the past 8 years and they are very professional. Plus they can update or alter your schedules for you as well in the future when needed.
Just curious, but would the forum allow for members to name and shame… as well as list those that are good companies so that other people may be able to be better informed on this.
A sticky forum with a first post that someone can edit with names of good and bad companies, maybe even with an average score out of ten that is the average of what other people have scored them, could help us all to decide on who to talk to and who to steer clear of..???
I have just enlisted "Depreciator" to create my 3rd depreciation schedule for me, they do a fine job as far as I am concerned, some people may think they are expensive, but I have seen cheaper reports, and some of them are just down right useless. I know how to read the ones Depreciator give me so I stick with them.
They usually get the schedules done in just a few weeks, and they send you reminder emails to make payment before the end of FY so that you can claim it straight away. Whilst you need to wait for the schedule to DO your tax, you only need to make payment fore the schedule by 30 June to claim its cost at tax time, so I wouldn't stress about trying to get it done quickly just go with a company that will ensure your payment is complete by the EOFY.
Thank you Melanie for your insight into this, as I had not been able to find anything like that previously. It was one of the reasons I was hesitant about NRAS as my wife will most likely not be working for some time in the near future when we start having children.
Knowing this is great as it can help me make a more informed decision, and I can gladly say I am more than happy to be wrong with my previous comment (above).
Thank you for your response, this is great news… I can now tell my PM to go ahead with the door knowing I can claim it all back in a month :p
I did state in my first post the majority was a tax offset, and that is all I was trying to point out, I did not intend to be rude so I apologise if it came across that way, it just that the distinction between cash and tax offset is often misunderstood with NRAS.
This can be quite significant to individual financial situations, and I just want to make anyone who is thinking about it aware of this, so they can then make the correct decision for their situation.
Other than that it is good to hear from someone who has used the scheme and has feedback on it.
I just want to point out one thing before you go ahead with anything… an obvious statement but I will clarify why I say it.
CHECK THE CONTRACT!!!
For one, you want to protect yourself and make sure the developer isn't going to sue you if you back out of it.
Also, check if there is anything in the contract about finance, some contracts may allow you to bow out gracefully and even receive a full refund of your deposit if you cannot obtain finance. I know it is a bit late now, but I would never sign a contract if it did not let me out if I could not obtain finance. I pulled out of one many years ago as I was not able to get that guarantee, luckily I had only put down a $1000 refundable deposit at that stage.
Finally if all has gone to poo, try to negotiate with the developer, he may be in the same situation with most buyers, and does not want to have to resell an entire estate… he may give you a discount of some of the $60k .
Though, I doubt he will give you any discount, he may let you purchase the property at the price you can get a loan for, and then "chase" you for the difference (as if he was selling to another buyer… only he doesn't have to find another buyer as he still has you at the lower rate… you will still be expected to pay back the rest of the money though…) If you were to negotiate a repayment plan after your property/mortgage was settled it would save him the time trying to sue you. Hinting bankruptcy and telling him you have no other assets or cash may be enough for him to do a deal as well, if he can't get anything out of you it may prompt him to rethink a deal that will get him some of it…
wendywoo wrote:The amount of cash incentive NRAS gives is currently around $9800, not $7486.
Not to be rude wendywoo but this is incorrect and was the exact thing I was trying to point out to would be investors, as a statement like that can cause people great financial hardship.
The $7486 is correct and is a federal government Tax offset NOT a cash incentive as you say it is (as per my first post)
There is also a $2495 cash incentive from the relevant state government, which is as it says cash.This is all listed in the following link about halfway down the page under the subheading "Background":
http://www.fahcsia.gov.au/sa/housing/progserv/nras/Pages/about_nras.aspx
The fact that it (or at least the majority) is a tax offset and not a cash bonus is the main thing people need to be aware of, that you need to pay enough tax in the first place to get it back, otherwise you will simply be out of pocket.
Ok,
I have been doing some digging and have found this on the ATO website:
http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/00270218.htm&page=10
I just want to confirm that I am interpreting it correctly… the part under the heading "Cost is $300 or less".
The IP is owned 50/50 by my wife and I, does this mean that if the item costs less than $600 (ie less than $300 each) we can both claim it as an immediate deduction, meaning a $400 door with installation would be immediately claimable by both of us, as it is only $200 each?
All I can say is, make sure you pay enough tax to offset the NRAS tax offset you get.
The way I understand it (and someone please correct me if I am wrong) the majority of the money (currently $7,486) is a tax offset, which means you only get it back if you pay tax, and if you are already claiming enough back on tax you may not get the full benefit. Also you state "we" if you were to purchase the property 50/50 with a partner and one of you is not earning an income (or at least over the new $18k threshold), there goes half of that tax offset…
Other than that, it looks like a great scheme, and I am considering it myself, as it allows select vetted people live there (not "houso's" as some people think), and can actually turn your property into a cash flow positive property from day one.
As the amount you get is not based on the rental, finding something with a lower rental (ie not in the middle of a major city) would be more beneficial to the savings you get.
My only suggestion would be make sure it is in a good area, ie: the mines are great and will last for years to come, but what if they stop mining where you buy, or the economy does go to crap and the mines stop… will you be able to rent the property out to someone else? Make sure it is in a good location people will want to live at any time, and after NRAS is gone… invest for the long term not for the short term profits.
I have to agree… you get what you pay for, when leasing a property people too often go for the PM that is offering 0.5 to 1% less commission… at the end of the day 1% commission on $1000 is $10… a small amount extra to pay per month for peace of mind.
I believe the best agent is the one with the best communication, they constantly let you know how things are going, contact you when things need fixing and pass on their finding in inspections, as well as passing on tenants requests or concerns. I hate nothing more than a PM who decides that MY property shouldn't have something that the tenant requests.
The worst time for me is when I buy a new property and have to find a PM, as if you get the wrong one you can be in for troubles, fortunately I currently have great PMs working for me.
The only PM I ever had that I never doubted, was one that I rented through when I was younger, and I hated them then as they were really strict… over the top even. I still don't really like them as they left a bad taste from my dealings with them when renting, however, due to the fact that they are managing my PPOR and most expensive property, at least I have peace of mind they are not going to let anything go wrong, and are not going to let a tenant walk all over them.
At then end of the day, a good agent/PM is worth their weight in gold, as without them you could end up with a tenant from hell and a pile of bricks you use to call your IP.
Kristin Simondson PBRE wrote:Maree,The tenant would then have to pay an excess and their premiums would be likely to go up.
This is incorrect, an insurance company will not raise a premium, nor do you have to pay an excess if you are not at fault, as long as the responsible party is identified (in this case the owner). The premium may change only if, after investigation, the tenant was found to be at fault for the damage to his car and not the owner.
If my garage door did not open and I rammed my car through it, I would not only be at fault, I would be liable for damages. In this situation if the tenant used it, he is responsible for all damages to his car not the owner, had he parked his car on the street and the car was vandalised, damaged or stolen he may very well be able to point the finger at the owner as he could not get to the garage.
Also if he had parked on the street he may be able to claim for a reduction in rent costs as he could not use his garage – not so if he has been using it, and if he is a good tenant offering him $10-20 a week less is a fair amount if he cannot use the garage for his car, remind him however he can still use it for storage. If he wants more off as he cannot use the garage ($20-$50), tell him that you will gladly remove the garage from his use and reduce the rent (changing locks so he cannot get to it), however he will not be able to use it for storage or access, and perhaps you can rent out the garage to someone else who needs storage… you could probably rent the garage out for $50-200 depending on the location (outer suburb vs inner city).
At the end of the day it is a negotiation and both sides giving a little is the way it should go, if he is going to be firm about it take the garage away, if he is willing to negotiate, then try to come to some compromise, as a small rent reduction is not a lot of money and any loss can be offset on tax anyway so the loss is even less.
(It appears other owners do not want to fix the problem, if they do then great, but this is a solution for if repairs are not going to happen).
I am still safely within the thresholds for now, and knowing that I can purchase in other states with a new threshold is an advantage.
Am I correct in reading that the threshold for NSW and QLD are 387k and 600k ( http://www.osr.nsw.gov.au/taxes/land , http://www.osr.qld.gov.au/land-tax/about-land-tax/land-tax-rates.shtml ) or am I reading it wrong? This is a huge difference, especially as Sydney prices are generally more expensive than in QLD.
Thanks swampy,
I found the land tax website through google, I do check there first before wasting time writing on a forum as if what I am looking for comes up easily it saves me time posting, however that doesn't really clarify my question 2 and 3.
Q2. I was asking if I had 200k of property in 5 states, assuming that the threshold is more than 200k in each state, would I still have to pay land tax because 5 x 200k is a total of 1mil throughout the country, or does each state only take land owned in its state into consideration. (I know I am not eligible for any state First Homeowner Grants (such as stamp duty exemption) as I own my home in NSW, so there are instances where a different state is not a consideration).
(I unfortunately don't actually own this much property… yet….
however am using it as an example).I clearly stated that my PPOR is rented out, therefore I would not have any utility bills in my name, as I have been required to relocate to another part of the country due to work requirements (I am in the ADF), the property is still able to be considered my PPOR for 7 years after I have vacated it. (I have heard of the possibility of this being able to be extended, but I would rather us not go into that here as it will only complicate the thread and steer it in another discussion).
Q3. With the above in mind, how do I ensure that it is always treated as my PPOR, and not as taxable land that the government would send me a bill on if I was to exceed the land tax threshold. (Perhaps this is something that my accountant should do at tax time, or is there something else I must do?)
Perhaps help from someone who has dealt with these topics or has a reference to a webpage that are usually
inconveniently hard to find that gives the detail on it would be of great assistance.Cheers
One other thing to remember is that whilst damage caused by a leaking tap is the responsibility of the owner, if it is determined that the extent of the damage was due to a long term leak and not something over night, again this is the tenants fault for not reporting it.
If it were their house, they would have it fixed straight away, so why not report it? Failing to report a problem that gets worse IS tenant abuse and IS their fault (however proving they knew about it is another issue – again for the insurance company to decide, because if the tenant disputes it and it goes to court it will be insurer v tenant and not you).
Mortgage Insurance can be partially refunded, though only if the value has been reduced below 80% LVR of the original valuation within the first 12 months of the loan. So you will not be getting any money back, and why would the bank want to cancel the mortgage insurance, if you default, they get paid out and the MI company chases you for the cash, it is detrimental to their business to do otherwise.
If you still insist on a new valuation, tell them you want to change the loan to an IO or P&I depending on what you currently have, or that you want to extend it by 10k to put a patio out the back. The first thing the bank will do is order a valuation to see if they will allow you to borrow more. Once the valuation is done, tell them not to proceed with the new loan.
Remember that you will incur the costs of the valuation, and will not get a copy of it, (so other than you paying for the bank to have a new valuation in their file you are achieving nothing). No bank has ever given me a copy of a valuation and I have always requested one in the hope that they may do so (from 6 loans with 5 different lenders) :p
At the end of the day if what you truly want is a valuation, go order one yourself.
I would suggest either raising your budget or moving further out, perhaps buying a unit in Brisbane outer suburbs, or something in Adelaide may be more beneficial.
Here is another topic with a similar line:
https://www.propertyinvesting.com/forums/property-investing/help-needed/4338229
I would suggest just going through your insurance company. At the end of the day they are in the business of insuring against accidents, and will not absorb costs if they don't have to (ie: will chase the tenant if it is their fault). The sooner you let the insurance company know, the better, as they will be able to get an assessor to check everything and make sure all your problems are gone. It is also your responsibility to report any damages to them, regardless of if you claim or not, if there is hidden damage that gets worse in the future they may refuse a claim, if they know about it they can decide whether to investigate, and if there is further damage later it will be on them to fix it, as you reported this incident.
Just make sure to let them know that you suspect it was the tenants fault and they can then decide whether they want to absorb the cost or chase the tenant. If they chase the tenant you will pay no excess, receive no premium penalty, and go on happy with your $1400 in your pocket. If they find it is no ones fault, they can ensure all damage has been fully repaired, charge you the excess, and your premiums may rise slightly (though no where near $1400, and I would suspect not even $140).
This is just my opinion though, as you have asked for, so if others have a different opinion I would like to learn from it also.
I am not overly familiar with Tennant Creek and I may be wrong, but as far as I am aware it is a very violent and unsafe area. I am currently living in Darwin and have had may colleagues and friends pass through there only to comment on how unsafe it is. Apparently the hotels have 24 hour roaming security, it is unsafe to venture out at night and I personally know someone who had their hotel room broken into and items stolen, whilst passing through. This is a short term issue, and the NT Government is trying to clean it up, but as I said I am not overly familiar with the area, so cannot say how this "clean up" is going and if it will be a short term thing or go on for many years.
On the other side, I have been looking into SE QLD for the last 12-18 Months for investing, and am at present purchasing a property in the Ipswich region (an area also recommended to me by my cousin who lives in Brisbane and has owned property in SE QLD for the last 10 years). Whilst the area was hard hit by the floods the area is still great, though try to avoid some of the dodgy house and land packages and estates that are aimed at interstate investors who don't have the time or inclination to travel to the area. Some of the surrounding suburbs are quite cheap (270-315k) and this area is along a great future growth corridor. I ws down there just this weekend, and there is a lot of highway upgrades going on as well as a train line going in. With the recent price drops of the Queensland region I believe this is a great opportunity for anyone looking for an IP, and I am putting my money where my mouth is on this one.
I want to point out that the prices and areas I am talking about were not affected by the floods, and they are not "firesales" on dodgy or flooded houses.
Anyone else who has anything good or bad to say about Ipswich chuck it up here as it would be good to read some other perspectives, as well as provide insight to other investors.
however am using it as an example).
