Bye Bye NSW Property Market (long)

Wrappack, I would still go full steam ahead with that duplex if I were you.

Just buy it in two names, yours and your wife’s (or mother or girlfriend).

By living in one you at least will avoid tax on at least one of them if it becomes your personal residence at first.

Sorry, I just realise that I didn’t suggest for you to consider to also have an agreement drawn up which goes along the following lines :

1. the two buyers are A + B
2. upon completion of the project each party is to receive a seperate title for what ever their share entitles them to.

By having a written agreement (which may possibly need duty stamping) drawn up one can seperate the personal use dwelling from the dwelling which (I assume) you want to sell at some stage two things are achieved :

1. you have established right at the beginning your intention as far as the tax department is concerned so there is no room for dispute.

2. you won’t have any difficulty to transfer the title to your wife at a token amount of stampduty ($ 12-00 ? $ 15 ?).

As always, take the main points to your solicitor and have him draw up the agreement AND always verify the value of the above with your accountant.

Pisces

Majic, the 2.25% (on gross sale price) will apply to all properties sold after a certain date (I forget), as long as it is about 15 or20% more than was paid. It is not just for ips bought ‘after’ a certain date- as happened with the CGT in 85

Pisces, I think that my duplex idea is brilliant, but i fear that the overall investment climate has sudddenly chilled. In the paper today, auction clearance rates on the central coast was 32%, and this ignores the ones pulled prior to auction. For sale signs have sprouted on many lawns, even ones that were recently sold (last year or two- ?new landlords getting out of the game). In the same way that a rising tide lifts all boats, a falling one must also do the same. With apartments about to be in free fall, and some townhouses untenantable, I dont think nsw (or certain parts of it) have any value. Yes, our population will continue to increase much greater than every other state, and the supply of land is basically fixed, but the oversupply of ips must hurt the market at some stage. I think six months is a good time to sit on the fence.

And Mysta, for 44c, lets see, my work rate is about $300 per hour, so 44c is about five point two eight seconds.

Hi all.

For what it’s worth I believe that other states (including those overseas destinations New Zealand and Tasmania) will follow suit so there is nothing to be gained by abandoning NSW on the basis of this unfair tax alone. A wise investment remains a wise investment.

I feel that the real lesson to be learnt here is that governments can change the rules at anytime. Interest rates will no doubt rise in the future(a safe assumption).

If Jan Sommers is to believed the housing market is made up of between 66%-75% owner occupiers which leaves 25%-34% people renting. Surely if every homeowner bought just 1 investment property there is going to be a few empty properties? Or is that just me? I am not trying to be funny here.

At the end of the day (geeze I hate that expression) it’s the fundamentals that will seperate the investor from the speculator. A poorly located house which is over capitalised and over geared has to perform poorly compared to someone who has done the research.

Air goes in and out. Blood goes round and round. Any variation is a bad thing

>>Those of you following my other threads may know that I have been very keen on doing a duplex development, which if successful, would keep doing more and more. Found a site, perfect, and the numbers crunch quite well. Enter car, enter a different climate, particularly in 2-3 years time. Enter skepticism, and my plans are on the outer, and I will either i) sit on the fence (like most of nsw) or ii) go to qld and try something.<<

Wrappack, my understanding is that builders (and therefore developers as well I guess) are exempt of the 2.25% additional duty.

Isn’t that good news for you ?

Pisces

Ha ha, you are spot on Calvin. Not only if you buy and hold you can easily say who cares, this tax has smoked out all the sellers who have jumped on the market all at once, choking it with listings that where waiting for another extra $10,000.

Never been so good to buy in Sydney, not since 1992, and it is going to get even better if we get a rate increase next month.
Welcome, by the way!

May God prosper you always.[biggrin]
Marc

How great is Bobby Carr?
Well done Bob.
P_ss off the pretend property investors and let the real investors get on with the task of property.
“When the going gets tough,the tough get going”.
All the wingers please nick off.
Brain dead developers are building block after block of units as there’s no to-morrow. Most are JERRY built.Thown up in a minute,sold to dumbies
by the truck load.
Where are these people’s brains? Off the plan buying.On completion these buildings, floor plans
have been changed to suit the builder. Smaller balconies, smaller car spaces,kitchens not to specifications etc.
No wonder we need Bob Carr to hit the industry over the head. WAKE UP EVERYBODY, time to THINK!!!
Now the good news,for non NSW people. If this works for NSW(more taxes to treasurery. Slowing of the boom). Every other state Government will be doing the same.No Premier wants to be the first!!! That simple.
S.McK. you say that Australians are over taxed.
WRONG. We don’t pay enough!! Look around you every thing is collapsing around us. Insufficient
money for eduction,hospitals in need of major repairs.The list goes on and on.
Steven, Australia is in the middle of OPEC nations when it comes to highest and lowest nations taxation rankings.

bbruham
A one property millionaire[whistle][whistle]

Originally posted by melbear:

Taxes scare off the little guys. Taxes are inconsequential – they are a minor part of the reason to invest. A true investor doesn’t worry about taxes. They take advantage of a falling market and make their money then!”

O.K. Melbear, so 2.25 % of the difference between purchase price and sale price is nothing.

Never mind that because of renovations the deal may well be a losing deal, a tax is a tax is a tax.

So what about a 2.5 % slug ?
If still O.K., then what about a 3 % slug ?
What about a 5 % slug ?
Etc, etc.

The words ‘A true investor doesn’t worry about taxes.’ do have merit but not in this context.

The only time they have merit is when one is tempted to go into a deal with the main motivation for going into it being because of the tax deductions one (hopes to) get out of it.

Many people have run into problems in such a situation because they were greedy and ignored the validity of the proffered tax avoidance scheme.

But to say ‘Slug us with another tax, it doesn’t matter as I am smart enough to take it into my stride’ is a recipe for disaster.

Pisces

Pisces

Did you note my post read: ‘A message from Robert Kiyosaki’?. Have another look.

Why does a true investor not worrying about taxes not have merit in this situation? Are you planning on selling? Oh yes, that’s right, you are looking at wrapping – but you can get away with it if you mark up by 11.9%!

I will not plan on selling any of my properties for a good while – if ever. I think to rush and sell now to avoid the tax is rather ludicrous. Especially with the ‘discount’ that a lot of sellers are giving. It’s like asking for a 10% discount for cash so the merchant doesn’t pay the (3? 4? %) credit card fee.

I hope that a lot of other people do hold off selling now – it will mean less supply, and therefore, what? That’s right – higher values, values which I can use to borrow further.

Cheers
Mel

Pisces, that may be your assumption, but it has not been mine.

And where was it that ‘I’ or even Kiyosaki said

‘Slug us with another tax, it doesn’t matter as I am smart enough to take it into my stride’ is a recipe for disaster.

Cheers
Mel

New South Wales in the grip of Terror.
I have decided I am going to Buy Buy Buy and Hold Hold Hold.
We could debate the Government of the day but we can not do any thing about it, and if we could change the Government, would we want to?
same ole same ole [bandana]…who ever said lets give the battler trying to make a secure life for the future , a fair go. Not any government I have heard of, [buz2]