Gotta add my 1 cent here….Sorry folks
Get out there and INVEST…. at the end of the day, we have to live with the tax at least until the next NSW election, or, heaven forbid, buy in another state….
Whilst I agree with Melbears qoute from Kiyosaki about taxes, you do still have to consider the cost of taxes, if AND ONLY IF, you plan to sell….. AND by the time you may want to sell, whos to say whether that tax still exists…
BY ALL MEANS, incorporate it into your investing plans, but, get out there and go for it…. the 2.5% tax should not be putting anyone off…..
YES, it’s unfair…. SO WHAT…… you cant do much about it now…. so get used to it for now….
Just dont let it become an excuse for inaction…..
peace all…
Howdy Scott,
Even after June 1st, if I only buy and then flip for 11 – 11.99% more then what I paid for the property, then I dont have the tax to pay and still make a nice little profit each time. Seems that the market for sellers will be mostly to the Mums and Dads and far less investors.
Even REAs are now presenting offers to vendors that in the past I could only do directly with vendors.
I agree with everyone who does not think NSW is a good place to invest. Get out, go to another state, while you still know everything!
Sincerely,
Dallas & Kerrie Kelso
W: http://www.WeBuyHomes.com.au
E: [email protected]Even after June 1st, if I only buy and then flip for 11 – 11.99% more then what I paid for the property, then I dont have the tax to pay and still make a nice little profit each time.Mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm.
So, if you mark up a property at say, 11.5%, how much of this net ‘profit’ would be eaten up before you have seen it by stamp duty, solicitors, conveyancers, REA, repairs, maintenance, advertising, and the fun of paying interest on a vacant house waiting for an owner?
Consider the simple fact of the fast paced world of the stock market. If a company announces (for any reason) a profit warning/downgrade that was previously unknown to the market, its shares will almost immediately head south.
The new VTT and the .7% holding tax will definately decrease the profit associated (in both the long and the short term) with nsw property.
Yes, we go through ups and down, or ups and plateaus, but perhaps one could consider the following:-
Just because a prop can be bought today for (say) 500k, that was 530k three months ago, does not mean that it is good value. The true value buy would be at the bottom of the market, or after the market starts to recover
I think we would all agree that the rosy days are over, that the long term outlook is very good, but we will agree to disagree on the one to four year period.
Ignoring taxes sounds like something only a half brain dead moron in a drunken stupor would believe. Changing tax laws can give a huge shift of billions of dollars one way or the other.
Example. A few years ago the ralph report gave a 50% cgt exemption to assets held for >12mo. This was a massive impetus to the property market.
Consider a few positives (at the moment) for investing in prop.
Neg gearing. If the gov overnight got rid of neg gearing, how soon would the dung hit the fan? (okay, I wanted to say shit, but we all know it gets bleated out)
Depreciation. If the gov said “no depreciation, you know the house will wear out and the taxpayer would rather pay for the old ladies hip replacements than your falling apart IP’s”, it would be another nail in the coffin.
Trusts. If all ips had to be personally owned, who would like the potential of being liable in todays litigious society. And not the limited liability company wrapped up in a trust sue me cause Ill go naked, but being personally liable, and that liability is unlimited. Okay, this would not happen, predominantly because EVERY politician has a trust to avoid paying their fair share of tax.
Mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm. Wrappack must be crappack, I hear some of you say.
Things would never change, would they?
Well, who read in the paper today about the Harts law case? The split loans saga, they took the nasty tax office to court and won. Then the ato went to the highest court in the land and won, so that now dodgy investors who want to claim interest on interest on interest on interest on interest on their original interest will be disallowed, as they bloody well should be.
A fundamental change will cause prices to fluctuate around a new ‘fair price’. Because that fair price is (imho) below prices 12months ago, we are heading into a bear market. Personally , Ill start buying after prices go up a bit, off their low point.
>>Just because a prop can be bought today for (say) 500k, that was 530k three months ago, does not mean that it is good value.
The true value buy would be at the bottom of the market, or after the market starts to recover<<
There isn’t anyone around who can say ‘This is the bottom’ unless something happens by way of a fundamental change.
So the only way to be able to tell with a certain degree of certainty (no, never with 100% certainty) is after prices have been rising for a reasonable time.
One such indicator would be if for some weeks in a row the clearance rate of auctioned properties has risen substantially.
Or, for that matter, when your friendly real estate agent tells you that the market is recovering.
Pisces
Or, for that matter, when your friendly real estate agent tells you that the market is recovering.“friendly real estate agent”- surely an oxymoron.
According to every real estate agent who has ever walked the face of the earth in every bull, bear and sideways market, NOW has always been the perfect time to list with them, sell with them, and buy through them. I sincerely believe that in the next million years or so, all rea will always be reading from the original script!
Seriously, though, like your idea Re auction clearance rates, but would also need to have prices increased as well, or they may be mortagee sales in a really bad market.
Yes, you are quite right with your remark, Wrappack.
Thanks,
Pisces
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