Housing Shortage

[red750]

41 minutes ago, Marty_d said:

But if you do stay put for years, then you can either pay rent to a landlord or repayments off a mortgage, and in only one of those cases do you end up with an asset to show for it, not to mention being able to alter it however you want and not having the worry of being evicted one day.

Right on Marty. Particularly the part I italicised. That was my wife's biggest fear, if something happened to me. I have lived here since 1979, and paid my mortgage off early from my long service leave payout when I was retrenched after my employer was taken over. Haven't had to worry about interest rate hikes. Always wanting to upgrade to something more modern is a recipe for lifelong debt.

[spenaroo]

49 minutes ago, Marty_d said:

It's the age old buy-vs-rent debate.  Yes, if you don't plan to live in one spot for years on end then you may be better renting (or living on a boat, or out of a campervan, or a tiny home, or whatever takes your fancy).

 

But if you do stay put for years, then you can either pay rent to a landlord or repayments off a mortgage, and in only one of those cases do you end up with an asset to show for it, not to mention being able to alter it however you want and not having the worry of being evicted one day.

 

What I don't like in the housing market is speculative investors who do just buy for the capital gains, in some cases even leaving properties vacant for years.  That doesn't do anything for the housing shortage.  Airbnb etc is another problem (and yes I'm guilty of staying in them, and will again) because if your house is in a holiday area you get far more money from short stay accommodation, even with cleaning/maintenance, than you do from long term renters.

 

 

My generation is guilty of this.

conditioned that the property return should cover mortgage costs.

(not that tax dodge that taking a loss through negative gearing is)

So many people I know saw Air BnB as a get rich scheme - with growing property portfolios.

just need that first investment...

[willedoo]

I think some people are trying to cash in on the rental crisis. The rental asking price for this donga is $485 per week. That's a lot of money for a space you can hardly swing a cat around in.

 

 

[old man emu]

Don't forget that Capital Gains Tax is pretty hefty for the individual. On component in the calculation of the  tax payable is your current taxable income. This will help determine the tax rate at which the capital gain on your asset will be taxed. It's important to note that any capital gains amount will be added to your current income before calculating the tax rate — i.e. a capital gains amount could force you into a higher tax bracket. This might be minimised by purchasing a property as a couple, so that the capital gain amount is split.

 

Someone mentioned the need for Australia to take in people with skills. The Department of Immigration does. It is the other government departments, and professional bodies that fail to recognise those skills resulting in us having the most highly educated Uber drivers in the world.

[red750]

I will live in my house until I die. My kids will inherit the property. Any capital gain for them is calculated from when they receive title. My son and daughter live with me and have done their whole life, it is their only known home. Death is the only way to avoid capital gains tax.

[onetrack]

There's no CGT on your family home - but this idea has passed it's use-by date, as people now buy $1M-$2M homes, spend hundreds of thousands on extending them, then sell them for $2M-$3M and pocket all the capital gain, tax-free. I believe that one day the Govt will be forced to apply CGT on family homes over a reasonable value.

[willedoo]

16 minutes ago, onetrack said:

There's no CGT on your family home - but this idea has passed it's use-by date, as people now buy $1M-$2M homes, spend hundreds of thousands on extending them, then sell them for $2M-$3M and pocket all the capital gain, tax-free. I believe that one day the Govt will be forced to apply CGT on family homes over a reasonable value.

Maybe they could apply CGT to expensive properties that have been turned over in a short time. In my case being on the pension with a block more than one hectare, the only way I'm allowed a full pension is because I've lived here more than 20 years. If they applied a certain term of residency exemption for CGT on properties over a certain value, it would be fair. Someone living in their home for 20 years then selling can hardly be considered  profiteering speculator. The problem with it is where do they draw that line for CGT.

 

25 minutes ago, onetrack said:

There's no CGT on your family home

None on your home plus one hectare or less. If the block exceeds one hectare, CGT applies to the balance of land exceeding one hectare.

[facthunter]

If you pay CGT you'd have to Allow ALL expenses incurred.   Nev

[octave]

49 minutes ago, willedoo said:

None on your home plus one hectare or less. If the block exceeds one hectare, CGT applies to the balance of land exceeding one hectare.

We faced this when we sold our 44-acre plus house.  We did our own valuation and whittled the  CGT down to I think $1500.  You can select the most valuable hectare to exclude and of course, you can deduct costs. 

[red750]

My block is only 0.1325 acres. (33.5m x 16m)   (Google conversion).

[nomadpete]

1 hour ago, willedoo said:

If the block exceeds one hectare,

I thought there was a 'Two Hectare' rule?

[octave]

8 minutes ago, nomadpete said:

I thought there was a 'Two Hectare' rule?

 

Yep, it is 2 hectares or 5 acres

 

Edited March 14 by octave

[willedoo]

My mistake, I meant two hectares, approximately five acres.

[red750]

They're trying to address the problem around the corner.

 

It is 6:45 pm on Good Friday. My daughter just wallked her dog and said the tradies were working on the house unnder construction around the corner.

[willedoo]

As an offshoot to the housing crisis, it's getting harder for the average battler to stay in their own home that they own if they happen to be in a growth area where land values are increasing sharply. Most authorities care little about people who have always lived in these areas; the attitude is usually that you can sell for a good price and move somewhere cheaper to live. In my opinion, people should have the right to live where they have always lived and not be forced out of an area due to unaffordable council rates and state government charges. Unfortunately, councils in growth areas know that the loss of low income locals will be replaced by cashed up interstate migrants who are good for the economy.

 

The new state government land valuations are out and council is in line for a big cash windfall from rates next financial year when the new valuations take effect. My property increased by more than 60%, but some owners in the district have had up to 80% increases in unimproved property valuation. The corresponding rate increase (which is based on UPV) is a lot easier to manage for high income earners when it's viewed as a percentage of income. In my case, as an age pensioner, council rates will rise from about 6% of income to 9% of income. A high income earner might only be paying one or two percent of their income.

 

The catch is that the valuation increases will also make a lot more people liable for state government land tax. I've lived here on this property for 35 years and have never been liable for land tax until this last valuation. I'm hoping to get an exemption, but if I can't, it will mean another approximate 9% or more of income. Without the exemption, I would have to pay close to 20% of my income to council and state government just to live on my own land. I get it that some people would say what are you complaining about, that you can sell for good dollars and move out the back of Woop Woop and do alright out of it. But that's a speculator's attitude, and why should people be forced to sell up and move because they are priced out of an area.

 

Hopefully council will come to the party and reduce the dollar rate of calculation, or give larger pensioner discounts. State government also funds a pensioner discount on council rates and it's attached levies, but they don't give pensioner discounts on land tax. With the current political climate regarding cost of living pressures, council and the state government would be taking a big political risk if if they just sit back and take the windfall. As far as state government is concerned, screwing the public over in an election year is not a smart tactic.

[Marty_d]

Reverse mortgage is another option.

[willedoo]

I guess it's an option, but for a debt free person to have to borrow money to fund the government fees and charges component of increasing cost of living doesn't sound like the type of society we should be aspiring to. A better option would be for local and state governments to have a good look at themselves and think about the people's expectations of them.

 

A good example is local government. It beats me how they justify charging $3,000 in rates per annum for a block with zero services. No water, no sewerage, the road verge slashed a couple of times a year and that's it. If you want water, you fund that infrastructure yourself. Ditto for a dunny. Pay for your own pump out system or pay tens of thousands of dollars for a stand-alone treatment system. Hopefully things might change after the recent council elections; it looks like we've got some real people in there this time.

[spacesailor]

Out here in this city suburbia. 

An empty block incurs,  land tax,  unimproved valuation rates, water charges , sewerage charges. 

And if have the adjacent block with house & pool, you have to pay penalty water rates , for excessive water use. I told one owner to have the water put on the spare block, just for the pool filling & car washing . Saved lots of money & arguments over those pool parties , as well as washing friends cars . 

spacesailor

[red750]

Not housing this time, but the trend conntinues:

 

Major construction companies specialising in road building have collapsed, reportedly owing creditors more than $80million. 

 

Allroads Pty Ltd, a Brisbane-based civil construction company, and its subsidiary Allroads Plant went into administration on March 4.

 

Administrators Darryl Kirk and Stephen Earel, who are partners at insolvency firm Cor Cordis, have now written a creditors' report outlining how both companies together owe $83million to almost 1,000 creditors.

[red750]

https://www.dailymail.co.uk/news/article-13334467/Why-single-photo-Australian-suburb-sparked-huge-debate-future-country.html?ito=social-facebook

[old man emu]

1 hour ago, red750 said:

https://www.dailymail.co.uk/news/article-13334467/Why-single-photo-Australian-suburb-sparked-huge-debate-future-country.html?ito=social-facebook

 

[facthunter]

Who trusts the Daily Mail?  Nev

[spacesailor]

My ' across ' the road neighbours are leaving this weekend as their rent has gone to $ 650 weekly .

The thing is , they had the " whole house & garden " .

For a bit less than their current rent.

Now they have a new granny flat in the back , $550 weekly . 

spacesailor

 

[spenaroo]

$150 a week is still $150 a week.

doesn't matter what you get if its $150 more then you can pay

[old man emu]

Ah! Rental property ownership - the American Dream. Why try to get into someone's nickers when you can screw them in the hip pocket.

 

What a lot of these landlords need, having forced long term, regularly paying tenants out by jacking up the rent, is to rent the place out to people who don't pay the rent beyond the first month, wreck the place, then disappear into the night. 

 

The place I rented for many years in Sydney from 2016 was probably built in the mid-90s. That means an average 25-year mortgage would have been paid off in 2015. From then on, the landlord would have been receiving, at least 75% of the weekly rent, after agent's fees, insurance and rates. Happily the rent wasn't raised and the only repairs were the replacement of the hot water service and oven. The rent did go up $50 just before I moved out, and another $150 afterwards. I had a good landlord.