» Finance news

2023 Property Market Year in Review

BMT team — Mon, 20 Nov 2023 22:47:43 +0000

Despite ongoing interest rate hikes, high inflation and a subsequent ease in consumer spending, the residential property market has shown resilience with a 7.0% growth rate in the year to November 2023. As at the end of November, residential real estate constituted $10.3 trillion of Australia’s wealth, with superannuation at $3.5 trillion, Australian listed stocks at $2.8 trillion, and commercial real estate at $1.3 trillion following closely behind. RESIDENTIAL AND COMMERCIAL PROPERTY VALUES There has been renewed growth in the capital cities property market this year. Brisbane properties have shown growth at an impressive 10.7% over the past year and dwelling values are currently at a record high. Perth has taken a definitive lead at a growth rate of 13.5%, followed by Adelaide which has shown a slowdown from a significant 13.4% in November 2022 in comparison with a growth rate of 7.6% in November 2023. In Sydney, dwelling values increased by 10.2% over the past year, but are still below the record highs of January 2022 and Melbourne showed a respectable 3.0% growth over the past year. Canberra, Darwin and Hobart have struggled to get above the line this year with values falling by -0.3% in Canberra, -1.5% in Darwin and -3.0% in Hobart respectively. The rise in the value of regional property has also slowed across the country showing a more moderate growth rate of 3.4% as of November 2023 compared to the 10.1% growth rate seen at the same time last year, suggesting a potential downtrend in the tree change and a return to city life for many. PROPERTY SALES Most residential homes across Australia take approximately 32 days to sell, with 10.2% more properties on the market across Australia, than the same time a year ago. Perth has once again broken the trend, selling within less than 12 days, highlighting the lack of availability and rise in demand in the already heavily burdened property market in Western Australia. RENTAL PROPERTY MARKET As always, rental rates in the capital cities have shown significant growth at 9.7%, followed by a much more muted growth rate of 4.1% in regional areas. Rental rates across Australia as a whole have averaged 8.1%. According to CoreLogic, there has been a slight compression in gross rent yields nationally to 3.69%, which is down from 3.70% the previous month. LOAN APPROVALS AND CREDIT Covid era fixed rates expired this year, forcing many Australians into mortgage stress, spending well above the recommended 30% of their income on mortgage payments. In 2020 the average three – year fixed rate investor loan was at 2.2%. For some, this has now increased to a comparable variable rate loan of up to 7.21% with the Big Four banks, averaging 6.0% for owner occupiers and 6.49% for investors. Lending standards tightened for all residential and commercial real estate loan categories, but secured, tenanted investors are still positively favored by banks with investor finance comprising 35.6% of new mortgage lending through October. This share of investment lending was highest across NSW at 40.4% and is trending higher than the historic average at the national level. Most owner-occupier loans granted this year were first time buyers, comprising 28.9% of new owner occupier finance, which is well above the decade average of 24.2%. indicating a positive uptake of government schemes for this market segment. In terms of the number of dwellings approved for construction, both detached home – and unit approvals trended well below the historic 10-year average, with units trending even lower than detached homes. INTEREST RATES The 25-basis point Melbourne Cup Day rate hike has taken no one by surprise, leaving 1 in 4 lenders now with loans greater than their incomes according to the Reserve Bank of Australia. The number of Australians defaulting on their home loans, now surpasses the mortgage stress peaks of the Global Financial Crisis, however, returns on interest bearing investments, such as term deposits, have been favorable. Many mortgage customers have also found a way forward by refinancing their loans at more competitive rates. BMT NEWS As quantity surveyors, we have been steadfast in our approach to depreciation, believing that a physical onsite inspection will ensure an accurate and reliable depreciation schedule that will earn the owner the highest possible tax deductions. In 2023 our stance was validated by the Australian Institute of Quantity Surveyors, whose principal mission it is to establish and uphold professional standards at all times, maintain uniformity in procedures, support industry education, and foster public faith in cost certainty and the quantity surveying profession overall. Since opening its doors in 1997, BMT Tax Depreciation has completed more than 900 000 tax depreciation schedules to date, averaging first full financial year deductions of almost $9 000,00 in all residential properties and more than $15 000,00 in new properties, once again cementing our position as market leaders in tax depreciation. To maximise property tax depreciation deductions on your property, Request a Quote from us. The information in this article is sourced from CoreLogic and the Reserve Bank of Australia. This article is general in nature and should not be taken as advice or a guaranteed outcome.

The post 2023 Property Market Year in Review appeared first on .

What the 2023 Federal Budget means for depreciation

BMT team — Wed, 10 May 2023 07:42:21 +0000

On Tuesday 9 May, the Treasurer delivered the 2023 Federal Budget which included changes to current business incentives and build-to-rent housing developments. In this article, we briefly summarise some key points from the Federal Budget which businesses and property investors should be aware of. Extension of the instant asset write-off The Australian Government has made the decision to temporarily extend the instant asset write-off incentive, which allows eligible businesses to claim an immediate deduction for the business portion of the cost of an asset in the year its first used or installed ready for use. There are adjustments to the eligibility of assets and businesses which are as follows. Rules in place until 30 June 2023: Businesses with an aggregated turnover of less than $5 billion can claim an immediate deduction for qualifying assets under temporary full expensing with no upper limit to an asset’s value. Rules from 1 July 2023 – 30 June 2024: Small businesses with an aggregated turnover of less than $10 million can immediately deduct the full cost of qualifying assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. This is on a per-asset basis, meaning multiple assets can be written off as long as they qualify. Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified pool and depreciated accordingly. The provisions that prevent small businesses from re-entering the simplified depreciation regime for five years if they opt out will continue to be suspended until 30 June 2024. Introduction of the Small Business Energy Incentive The Australian Government will support small and medium businesses to save on energy bills by incentivising the electrification of assets and improvements to energy efficiency. Under the incentive, small and medium businesses with an aggregated turnover of less than $50 million, will be able to deduct an additional twenty per cent of the cost of eligible depreciating assets that support electrification and more efficient use of energy. A total expenditure of up to $100,000 will be eligible for the Small Business Energy Incentive, with the maximum bonus deduction being $20,000. A range of depreciating assets, as well as upgrades to existing assets, will be eligible for the Small Business Energy Incentive. These will include assets that upgrade to more efficient electrical goods such as energy-efficient fridges, assets that support electrification such as heat pumps and electric heating or cooling systems, and demand management assets such as batteries or thermal energy storage. Eligible assets will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. Certain exclusions will apply such as electric vehicles, renewable electricity generation assets, capital works, and assets that are not connected to the electricity grid and use fossil fuels. Changes to Build-To-Rent Housing Developments The Government has announced changes to build-to-rent housing developments which accelerate tax deductions and reduce managed investment trust withholding tax rates. For eligible new build-to-rent projects where construction commences after 7:30 pm (AEST) on 9 May 2023, the Government will: increase the rate for the capital works tax deduction (depreciation) to four per cent per year reduce the final withholding tax rate on eligible fund payments from managed investment trust (MIT) investments from thirty per cent to fifteen per cent. This measure will encourage investment and construction in the build-to-rent sector, which will expand the Australian housing supply and benefit renters and property investors. This measure will apply to build-to-rent projects consisting of fifty or more apartments or dwellings made available for rent to the general public. The dwellings must be retained under single ownership for at least ten years before being able to be sold and landlords must offer a lease term of at least 3 years for each dwelling. The reduced managed investment trust withholding tax rate for residential build-to-rent will apply from 1 July 2024. A consultation will be undertaken on implementation details, including any minimum proportion of dwellings being offered as affordable tenancies and the length of time dwellings must be retained under single ownership. The information in this article is sourced from the Australian 2023 Federal Budget.

The post What the 2023 Federal Budget means for depreciation appeared first on .

2023 property market update

BMT team — Sun, 02 Apr 2023 23:14:25 +0000

2022 was an interesting year for the property market. Interest rates and rental yields increased, while property prices fell. Nonetheless, Australian investors persevered and made it through this challenging year. We sat down with Bradley Beer, Chief Executive Officer of BMT, and asked him some questions surrounding the property market outlook of 2023 and the latest BMT news. Read on for Bradley Beer’s insights into the year so far and what may lie ahead. What did the Australian property market look like in 2022? The value of the residential real estate market fell from $9.6 trillion in December 2021 to $9.3 trillion in December2022. Australian national housing values fell 5.3 per cent over 2022, the largest calendar-year decline since the Global Financial Crisis in 2008 where values fell 6.4 per cent. The median price of a residential dwelling as of 31 December 2022 was $708,613 with combined capitals at $770,374 and combined regionals at $577,616. What can we expect from the housing market in 2023? I expect that property prices will continue to fall as long as interest rates are rising. It is likely that sales from owners unable to service their loans due to interest rate rises and inflation will increase, with 35 per cent of outstanding housing credit on fixed terms and around two-thirds of these expiring in 2023. And what about interest rates? At 7.8 per cent, the Consumer Price Index (CPI) is still well above the RBA’s target of 2-3 per cent. To return inflation to target, the RBA has lifted the cash rate every month from May, with it now sitting at 3.60%, the highest rate in eleven years. It is expected that inflation will return to 4.7 per cent over 2023 and 3.2 per cent over 2024. How are rental markets performing so far in 2023? Rental markets have remained firm so far throughout 2023, with the current national rental vacancy rate sitting at a record low of 1.0 per cent. As of January 2023, gross rental yields were 3.9 per cent, a growth of 0.7 per cent from January 2022. CoreLogic reported annual growth in Australian rent values of 10.2% in the 12 months to December, a record high. The most rapid annual rise is evident in unit rents across Sydney, Melbourne and Brisbane, where rents have increased around 14 to 17% annually. What is loan activity looking like? The percentage of investor loans increased by 5.3 per cent between September 2019 and September 2022. New variable home loan rates for owner occupiers increased from a low of 2.41 per cent in April 2022, to 4.58 per cent in October, notably impacting housing affordability. While the rate rises are making owner-occupier mortgage repayments less affordable, investors are less impacted thanks to the tax deductibility of interest on investment loans. How will changes to international borders and migration affect the market? To ease workforce and skill shortages, the permanent migration quota has been increased from 160,000 to 195,000 in 2023, with all additional spaces allocated to skilled work visas. This will likely further decrease vacancy rates and increase rental yields and house sales. The reopening of borders has caused interstate and foreign buying activity to resume strongly which will likely continue to grow throughout 2023. There has been increased foreign investment in commercial property, with remaining popularity in the office and industrial sectors. What’s the latest in BMT news? In BMT news, we reached a milestone of 800,000 schedules completed since opening our doors in 1997 – an accomplishment we attribute to our valued clients and referrer partners. In 2022 we also found clients an average of almost ten thousand dollars in depreciation deductions within the first full financial year. Last August saw BMT’s private equity partners exit, and the executive team acquired one hundred per cent of the company. This allows us to have full control to drive the future direction of the business. Our strategy focuses on customer service and thorough, accurate reporting, always with the aim to maximise claims and make life easy for our clients and corporate partners. Now that we are on the other side of the pandemic and have full control of the business, we will continue to find customers the highest compliant deductions while delivering the outstanding customer service that we are known for. We look forward to seeing what the year will bring. The information in this article is sourced from CoreLogic and the Reserve Bank of Australia. This article is general in nature and should not be taken as advice or a guaranteed outcome.

The post 2023 property market update appeared first on .

Everything you need to know about interest rate cuts

BMT team — Thu, 03 Oct 2019 00:17:09 +0000

The Reserve Bank of Australia (RBA) made history in the first week of October, slashing the official interest rate and signalling further cuts in the coming months. What is the current interest rate? The RBA dropped the official interest rate to just 0.75 per cent on Tuesday, 1 October. The first time the official cash rate has dropped below 1 per cent in Australia and the third rate cut since June. Interest rates are significant in affecting the economy, which is why the RBA’s decision is so important. If interest rates are lower, it’s likely to encourage more people to take out a mortgage and purchase a property or take out a loan for home renovation. Why did the RBA drop the interest rate? In a statement issued after the call, the RBA said they made the decision to lower the rate in a bid to revive consumer spending, lift Australia’s otherwise stagnant wage growth, drive employment and provide greater confidence that inflation would be consistent with the medium-term target. RBA Governor, Phillip Lowe also noted trade conflict between the United States and China as a contributing factor. “While the outlook for the global economy remains reasonable, the risks are tilted to the downside. The US–China trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans because of the increased uncertainty,” Lowe said in the statement. “At the same time, in most advanced economies, unemployment rates are low and wage growth has picked up, although inflation remains low. “Interest rates are very low around the world and further monetary easing is widely expected, as central banks respond to the persistent downside risks to the global economy and subdued inflation.” Have the banks passed on the current interest rate? So far, the big four banks have baulked at passing the official interest rate cut in full to consumers. Both the Commonwealth Bank and National Australia Bank (NAB) defied the RBA by refusing to pass on the cut in full just hours after the decision. The Commonwealth unveiled its mortgage rate changes, withholding 12 basis points from borrowers. Treasurer Josh Frydenberg blasted the two banks for failing to pass on interest rate cuts in full, saying it was “very disappointing” and that “customers should vote with their feet.” Reduce Home Loans cut interest rates by 0.20 per cent with the lowest variable rate currently at 2.69 per cent. Homestar Finance and Athena Home Loans both dropped 0.25 per cent, with variable rates at 2.74 per cent and 2.84 per cent respectively. Will there be further rate cuts? The RBA has suggested that another rate drop is expected to take place if the economy remains subdued, however when this might occur remains unclear. “It is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target,” Lowe said. “The [RBA] Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.”

The post Everything you need to know about interest rate cuts appeared first on .

Federal Budget 2019 breakdown

BMT team — Wed, 03 Apr 2019 04:53:44 +0000

The 2019 Federal Budget was handed down by Treasurer Josh Frydenberg on Tuesday, 2nd April at 7:30pm AEST. Taxpayers, commuters, regional Australia and small to medium businesses were among the winners. Treasurer Frydenberg announced the Australian Federal Budget will be back in the black for the first time in twelve years, with a budget surplus of $7.1 billion dollars forecast for 2019/2020. What does the Budget 2019 mean for Australian property? According to Morgan Stanley, the 2019 Federal Budget is unlikely to kick-start property prices or buyer confidence. However, the property market needs stability and this comes through job creation, improved infrastructure and a support package for the small to medium business sector, which this budget delivers. Small to medium business owners will benefit from improved access to finance, with a $2 billion lending fund announced. This will deliver a direct, positive flow-on effect to the property market. Currently, if small business owners want to grow their business, they can leverage their home equity to do so. With access to better funding, small to medium business owners can grow their business and use their home loan to upsize their existing property or invest in the property market. Small to medium business owners with an annual turnover of less than $50 million will also benefit from changes to the company tax rate, which has been lowered to 27.5 per cent. This rate will be lowered further to 25 per cent by 2021/22. In addition, the Government announced they will increase the instant asset write-off threshold to $30,000 and expand access to medium-sized businesses with an annual turnover of less than $50 million. These changes will apply from 7:30pm AEDT on the 2nd of April 2019 to the 30th of June 2020 and will benefit 3.4 million businesses employing around 7.7 million workers. The threshold applies on a per asset basis, so eligible businesses can instantly write-off multiple assets. More than 350,000 businesses have benefited from the existing instant asset write-off rules and more businesses will benefit from the extension of this incentive. Regional Australia is the big winner The Government has increased planned spending on infrastructure and intends to deliver a total of $100 billion of investment over the next decade (including existing commitments). The national infrastructure plan includes a new road safety package, a long-term fast rail vision, investment in regional and international airports and funding for improvements to national roads. Regional farmers affected by the North Queensland floods will also benefit from $232 million in support. The Government will also provide up to $300 million in grants to help flood-affected farmers rebuild damaged farm infrastructure, to replace livestock and replant crops. Personal income taxes Australians will benefit from personal income tax cuts planned once 2018/2019 tax returns have been completed at June 30, 2019. The Government is reducing tax for low and middle income earners of up to $1,080 for single earners or up to $2,160 for dual income families for the 2018/2019 to 2021/22 income years. Taxpayers will be able to access the offset after they lodge their end of year tax returns from 1 July 2019, which is in just 13 weeks’ time. From 2022/2023, the Government will increase the top threshold of the 19 per cent tax bracket from $41,000 to $45,000 and the low income tax offset from $645 to $700. From 1 July 2024, the Government is also increasing tax thresholds further and reducing the 32.5 per cent tax rate to 30 per cent. By 2024, under the proposed changes there will only be three tax brackets: 19 percent, 30 percent and 45 percent. These changes will benefit both property investors and home owners as they will have more funds available to help pay down their mortgages or save for future investment. Looking ahead to the next election The 2019 Federal Budget from the Coalition delivered a strong focus on building a stronger economy and securing a better future for all Australians. This comes through lower income taxes, incentives for small to medium business and increased infrastructure spend. Australians need to be aware of how these changes will impact them and consider the Opposition’s budget response. Some previously announced Opposition policies could result in significant changes that will affect the property investment market. For a copy of Budget 2019/2020, click here.

The post Federal Budget 2019 breakdown appeared first on .

Property market update April 2019

BMT team — Tue, 02 Apr 2019 04:16:05 +0000

Property values According to CoreLogic’s March 2019 Home Property Value Index, six of eight Australian capital cities saw dwelling prices decline during the month, with Canberra values holding firm while Hobart values were 0.6 per cent higher. The national median dwelling price value, which has been trending lower for seventeen months and has fallen by a cumulative 7.4 per cent since peaking in October 2017, remains 15.9 per cent higher than five years ago. Darwin and Perth, where weak housing market conditions were driven by the post mining boom and weaker economic and demographic conditions, saw dwelling values fall by a cumulative 27.5 per cent and 18.1 per cent respectively since peaking in 2014. Housing is now very affordable in both these capital cities and first home buyers seem much more active compared to other cities across the nation. Dwelling values remained at record highs in Hobart and across regional Tasmania. In other cities values were only marginally lower including Canberra (-0.2 per cent), Adelaide (-0.5 per cent) and Brisbane (-1.6 per cent) and regional Victoria (-0.8 per cent). Although housing market conditions remain relatively healthy in these regions, conditions have noticeably softened over the past twelve months, with values either slipping or the pace of growth slowing. Residential listings International investment banking company, Morgan Stanley, reported March is typically the strongest seasonal month for Australian house prices and residential listings. The recent slowdown of falling house prices and listing availability is likely due to seasonality, rather than the prospect that house values may soon hit bottom. Vacancy and rental rates Rents across our nation’s capital cities slipped 0.1 per cent lower over the twelve months ending March 2019, the first negative reading since at least May 2005. CoreLogic reports the negative change in annual rental activity was heavily influenced by the Sydney market, where weekly rents were down 3.1 per cent over the year. Every other capital city apart from Darwin recorded a slight rise in weekly rents over the year. During March, CoreLogic also noted that gross rental yields have moved away from their record lows in both Sydney and Melbourne. However, these cities are still recording the lowest gross rental yields amongst the capital cities at 3.5 per cent and 3.6 per cent respectively. Other capital cities recorded average gross rental yields of 4.5 per cent, with Darwin and Hobart showing a higher yield profile. Nationally, regional markets are reflecting a higher gross rental yield relative to the capital cities. Finance and interest rates The upcoming federal election and potential changes to negative gearing and Capital Gains Tax (CGT) will continue to cause uncertainty for property investors in a market that has already been influenced by tighter lending policies and economic conditions locally and internationally. Some prospective buyers and sellers may be delaying their housing decisions until after the election. However, there is no guarantee investor certainty will improve post-election should there be a change of government and the opposition’s plans to wind back negative gearing and halve the CGT concession go ahead. The March 2019 CoreLogic report cites other factors are likely to help offset the housing market weakness, such as an expected cut to interest rates later this year. This could result in lower mortgage rates.

The post Property market update April 2019 appeared first on .

Property market update March 2019

BMT team — Wed, 13 Mar 2019 05:22:45 +0000

Property values According to CoreLogic’s Home Property Value Index for February 2019, seven of the eight capitals cities saw house prices decline during the month. The national median house price value also slipped a further 0.9 per cent. Hobart was the only capital city not to see a price decrease. Their median house price increased by 0.9 per cent in February to $489,000. Perth and Darwin housing markets were the hardest hit during the month. Both saw declines of 1.4 per cent and 1.3 per cent respectively. Sydney and Melbourne median house price values continued to drop a further 1.1 per cent and 1.2 per cent during the month of February. Sydney’s median house price value now sits below $900,000, down $14,000 from the month of January, while Melbourne’s median house price value dropped $11,000 over the month. Compared with March 2018, Sydney’s median house price value has fallen more than $160,000, while Melbourne’s has dropped by $105,000. February saw both capital city markets approaching 11 per cent annual declines (Melbourne 10.6 per cent, Sydney 10.9 per cent). The strongest capital city housing markets continue to be Hobart, Adelaide, Canberra and Brisbane. The top performing areas continue to be centered around regional Tasmania and the larger cities/towns surrounding Melbourne. These areas have a mix of lifestyle appeal, relatively affordable price points, access to amenities and transport options linking home buyers and tenants with major work precincts. Residential listings The number of properties advertised for sale has been consistently rising due to fewer buyers and longer selling times. Despite the surge in inventory, new homes being added to the market was down 19 per cent relative to last year, highlighting that vendor confidence is low. Buyers are firmly in the driver’s seat and in a good position to take advantage of the favourable circumstances. Vacancy and rental rates Rental conditions generally improved in February on the back of a seasonal rise in rental demand. Every capital city except Darwin saw weekly rents edge higher over the month. Regional areas also saw rents increase. Data from CoreLogic continues to show a trend of sluggish rental conditions across most regions of Australia. Nationally, rental rates were 0.3 per cent higher in February, but were up only 0.4 per cent over the past twelve months. Canberra and Hobart stand out as the tightest rental markets, with renters paying an extra 4.7 per cent and 4.6 per cent respectively compared with a year ago. The weakest rental conditions over the past year are in Darwin and Sydney, where rents have slipped 6.1 per cent and 2.9 per cent lower. Despite the relatively soft rental conditions, gross yields have continued to trend higher, especially across the capital cities where gross yields moved through record lows in August 2017, improving from 3.4 per cent since that time to reach 3.8 per cent at the end of February this year. Auction clearance rates CoreLogic reports there were 2,204 capital city homes taken to auction over the week ending 4 March 2019, returning a preliminary weighted average clearance rate of 55 per cent. The week’s volumes were slightly lower than the week’s previous 2,293 auctions held, which was the busiest week so far this year. The higher volumes last week saw the clearance rate dip below 50 per cent and it’s likely, as volumes increase, we will see clearance rates trend below this mark. Comparing results to one year ago, volumes are significantly lower than the 3,026 homes taken to auction over the same week in 2018. Given the combined capital cities posted another month on month decline in home values in February, it’s expected vendors will remain reluctant to auction their property while selling conditions remain challenging and year on year volumes will continue to trend lower throughout the year. Finance and interest rates Credit aggregates from the Reserve Bank of Australia and housing finance data from the Australian Bureau of Statistics have continued to show a consistent reduction in credit flows and mortgage activity, with a more pronounced downturn in owner-occupier credit growth visible through the second half of 2018 and now into the first quarter of 2019. It’s now been more than two and a half years since the RBA cut the official cash rate to 1.5 per cent in August 2016. The record-low interest rate is now the longest period rates have been left unchanged since the cash rate was introduced in 1990. What’s more, falling house prices are supporting the case to keep rates on hold even longer.

The post Property market update March 2019 appeared first on .

Six game changing property investment tools

BMT team — Wed, 28 Nov 2018 05:09:16 +0000

When it comes to property investment, there is no shortage of information about what budding investors should do in order to successfully venture into the property market. To make the process less daunting, BMT Tax Depreciation have several easy to use property investment tools available for your convenience. MyBMT is the latest complimentary service from BMT Tax Depreciation. Register for a MyBMT account today, for on-the-go access to depreciation quotes, schedules and estimates. Property Investors: view, update and download schedules upload files including photos and receipts share your schedule with your investment team Accountants: Request new quotes and updates to existing schedules see how your client’s schedules are progressing download completed schedules in CSV and Excel format Property Managers: view free estimates from your recently listed properties via New to Rent request a quote for a depreciation schedule on behalf of clients keep your clients informed about how their schedules are progressing Calculate depreciation deductions for your investment property The BMT Tax Depreciation Calculator helps you to estimate the likely depreciation deductions claimable for all types of property including residential, commercial and manufacturing buildings. Available online or as an app for iPhone, iPad and Android phone or tablets, the BMT Tax Depreciation Calculator is an indispensable tool for anyone involved in property investing. It’s renowned for its accuracy and provides usable figures and a genuine insight into the potential cash returns you could expect from an investment property Depreciation rates at your fingertips BMT Rate Finder assists Accountants and their investor clients to search depreciation rates on the go, with more than 1,500 plant and equipment items identified as depreciable assets by the Australian Tax Office, the BMT app helps to take the guesswork out of calculating the effective life of depreciating assets. Need to find just residential rates? BMT Resi Rates is an ideal app for Property Managers to help resolve disputes over damaged assets and assist with repairs and maintenance scheduling. Download BMT Resi Rates for iPhone, iPad and Android devices and make a quick search for any residential plant and equipment assets. Find out how much it will cost to replace your property The BMT Replacement Cost Estimator uses BMT’s construction cost data to provide a guide on the estimated replacement cost of your property. Simply select the property type, property suburb and quality of finish Enter in the floor area and then answer some basic questions about the property and click ‘Get an estimate’ Based upon the data that you have entered; the results will display the minimum and maximum range for the replacement cost of the building Discover the cash flow potential of any property PropCalc provides a comprehensive summary of the cash flow potential of any residential property. This online tool uses specific property information to provide you with the real cost of owning a property. You can use the generated information or add your own for a personalised cost. Key suburb data is provided and the tool features the ability to include changes in interest rates, maintenance costs, rates, insurance and much more, making property research a breeze. It can all seem overwhelming, especially for first time property investors. However, the good news is that you don’t have to do it all alone. There are professionals out there, whose very job it is to help you get started in the property market. If you would like to have BMT Tax Depreciation, the tax depreciation specialists, as a part of your property investment team, contact us today on 1300 728 726.

The post Six game changing property investment tools appeared first on .

Navigating investment property rules and regulations

BMT team — Mon, 19 Nov 2018 00:03:26 +0000

Are you confused about the tax depreciation and government grants associated with buying an investment property? With all the rules and regulations surrounding property investment and tax, that is understandable. Here are some tips to help. Understand how depreciation affects your cash flow Be aware of Capital Gains Tax (CGT) and any exemptions Learn the rules regarding stamp duty and first home owner’s grants (FHOGs) Use available resources to help with research Understand how depreciation affects your cash flow Experienced property investors will consider depreciation before buying their next investment property. Investors who purchase a property for income-producing purposes can depreciate the building and the items within. This depreciation can be claimed as a tax deduction, which can improve cash flow. In general, there are two types of depreciation that can be claimed: capital works deductions and plant and equipment depreciation. Property investors should arrange for a qualified Quantity Surveyor to inspect their home and prepare a depreciation schedule for their Accountant. To learn more about the types of depreciation and what is included in a depreciation schedule, visit our tax depreciation schedule page. Investment property rules and regulations vary depending on the type of property you buy, so it is important to seek expert advice from a Quantity Surveyor such as BMT Tax Depreciation to discover how legislation will apply to your individual circumstances. Investors should be aware of the recent changes to legislation relating to previously used plant and equipment found in second-hand properties. To learn more, visit our page regarding the changes to the depreciation rules. Be aware of Capital Gains Tax (CGT) and any exemptions Every investor who buys an income-producing property should discuss CGT with their Accountant from the outset of their purchase. An Accountant will provide valuable advice on CGT payable down the track should they decide to sell the property or remove any of the assets it contains. There are a range of CGT rules and exemptions for investors and it is important to be across them if you are planning to rent a property or your principal place of residence. Recent changes to depreciation legislation regarding previously used plant and equipment assets found in second-hand properties also play a role in ensuring CGT is calculated correctly at the time of sale of the property or removal of assets. To learn more, read our recent Maverick article, ‘Don’t sell yourself short on Capital Gains Tax’. Learn the rules regarding stamp duty and first home owner’s grants (FHOGs) If you are a first home buyer, it is important to do your research and know the latest rules regarding stamp duty and FHOGs in your state to ensure that you take advantage of any savings or opportunities that may be available. There have been recent changes to the rules. These changes impact both Developers and investors. Here is a summary of the rules in each state: NSW: From 1 July 2017, first home buyers will not have to pay stamp duty for both new and existing homes for properties up to $650,000. The duty will be reduced for amounts between $650,000 and $800,000. A $10,000 grant for builders of new homes up to $750,000 and purchasers of new homes up to $600,000 is available. VIC: Stamp duty has been abolished for first home buyers who purchase a property valued at or below $600,000 and phased in for properties valued up to $750,000. Both new and established homes are eligible for a first home buyer duty reduction of up to 50 per cent if the home is valued at $600,000 or less. A $10,000 first home buyers grant is available when you buy or build your first home valued at $750,000 or less. The grant is up to $20,000 if the build is in regional Victoria with contracts signed from 1 July 2017. QLD: First home owner transfer duty concession will be available for the purchase of vacant land, provided a place of residence is constructed. The stamp duty will be determined by the value of the land. A first home owner’s grant of $20,000 is available for those buying or building a new home up to $750,000 for contracts signed between 1 July 2016 and 31 December 2017. Contracts signed outside of this period qualify for the $15,000 grant. WA: A concessional rate of duty may apply to a purchase of residential property valued at less than $200,000, which will be the primary place of residence for the purchaser; or a business where dutiable value is less than $200,000, which the purchaser intends to continue to run indefinitely. First home owners buying or building a new home may apply for a grant up to $10,000. Contracts signed between 1 January 2017 and 30 June 2017 may be eligible for an additional boost payment of $5,000. ACT: Stamp Duty still exists. First home buyers might be eligible to defer payment of duty if they are also eligible for the first home owner grant. A FHOG of $7,000 is available for new, significantly renovated or off-the plan properties valued up to $750,000. NT: Stamp Duty still exists. A first home owner grant of $26,000 is available for first home buyers or building a new home or an established home from 24 May 2016. Plus, a first home owner discount on stamp duty of up to $23,928 for first home buyers purchasing an established home valued up to $650,000. TAS: All transfers of land are subject to duty on the instrument of transfer based on the value of the land (including improvements) or the consideration (including GST), whichever is greater (unless an exemption or concession applies). From 30 June 2018, the FHOG will be a $10,000 payment. Commercial properties The is no stamp duty on commercial property, as of 6 June 2018 for properties with a purchase price of less than $1.5 million. Use available resources to help with research There is a range of valuable tools and resources available to help you […]

The post Navigating investment property rules and regulations appeared first on .

Property market update – October 2018

BMT team — Tue, 30 Oct 2018 22:20:12 +0000

Property values The Australian property market has continued to weaken, with national housing prices falling half a per cent in September. This fall in market values has been consistent over the past twelve months according to the latest CoreLogic Home Value Index. Sydney house values have dropped 6.1 per cent over the past twelve months and Melbourne values are sitting 3.4 per cent lower. Not only are these amongst the largest annual falls across the Australian capital cities, but considering Sydney and Melbourne include approximately 60 per cent of the national value of housing, the shaky conditions in these cities continue to have a substantial impaction the overall national housing market. As national housing market conditions have slowed down, and credit seems to be less available, buyer numbers have thinned out. CoreLogic estimates of settled sales are down 10 per cent year on year nationally, whilst previously strong markets such as Sydney and Melbourne have seen the number of settled sales fall more substantially, down 19 per cent and 16 per cent respectively. There are more positive signs elsewhere across the country, with Brisbane, Adelaide, Hobart and Canberra showing signs that property prices are indeed increasing. With a change of Government possible in the near future, and Labor intending to change negative gearing policy, this could have a huge impact on pricing, particularly in Melbourne and Sydney. Residential listings New listings have commenced their anticipated seasonal rise thanks to the onset of spring and warmer weather leading into summer. However, the number of freshly advertised properties remains well below that of previous years. Despite the decrease in new listings, the total number of properties available for sale has climbed 9.5 per cent compared to one year ago across the combined capital cities. This wave in total listing numbers is highest in Sydney and Melbourne, where levels are now 22 per cent and 17 per cent higher than twelve months ago. A study conducted by analyst and buyer’s agency firm Propertyology revealed that Sydney and Melbourne markets continue to see housing oversupply, which is likely to cause slowdown in areas located in two of the major capitals. The oversupply has been driven by dropping property prices, increasing vacancy rates and easing rents. Vacancy and rental rates With capital city property values falling, rents continued to rise, despite gross rental yields gradually recovering from recent record lows. Whilst there has been a fall in properties available for rent, the most recent figures compiled by CoreLogic show the national gross rental yield at 3.73 per cent, lower than the decade average of 4.27 per cent. Nationally it is 4.2 per cent for apartments, and 3.6 per cent for houses. Recent figures from SQM Research indicate that the national vacancy rate remained steady at 2.1 per cent. Half of the capital cities saw their vacancy rates shrink by 0.1 of a percentage point, with the tightest being Hobart at 0.4 of a percentage point, followed by Canberra at 0.6 of a percentage point, Adelaide at 1.1 per cent and Perth at 3.6 per cent. Similarly, the capital city average asking rent for houses remained steady at $552 a week, but unit rents declined by 0.7 of a percentage point to $437 a week. The major growth standouts for rents were Adelaide and Perth, which saw both asking rents for houses and units rise. Adelaide’s asking rent rose by 0.5 of a percentage point for houses to $390 a week and by 0.3 of a percentage point for units to $300 a week. Meanwhile, Perth saw a more subdued rise of 0.3 of a percentage point for houses to $425 a week and by 0.1 of a percentage point for units at $320 a week. On the flipside, the capital cities that saw asking rents for both houses and units decline were Melbourne, which saw declines of 0.5 of a percentage point and 0.7 of a percentage point to $525 a week and $405 a week respectively, and Darwin, which saw declines of 2.0 per cent to $505 a week and $400 a week respectively. Auction clearance rates According to CoreLogic, the combined capital city auction clearance rates numbers have steadied over recent weeks, but they remain well below levels from a year ago. Across Melbourne, auction volumes rose. However, final figures saw the clearance rate drop to 45.7 per cent. This was not only lower week-on-week, but it was also the lowest figure since June 2012 (38.6 per cent). Over the week prior, fewer Melbourne homes were taken to market with a final clearance rate of 50.4 per cent. In Sydney, the final auction clearance rate fell slightly to 44.6 per cent last week, from 45.1 per cent the previous week. Across the smaller auction markets, clearance rates improved in Adelaide, Brisbane and Perth, while Canberra’s came in lower week-on-week. Building approvals Both house and unit building approvals are currently trending lower nationally. However, they do remain well above previous average levels. Finance and interest rates Mortgage demand is trending lower, largely due to an extensive decrease in investment lending. Previous housing cycles have generally been prompted by changes in interest rates, the current slowdown has been deeply influenced by changes in credit availability. Mortgage rates creeped higher in September, with the average discounted rate for owner occupiers rising from 4.50 per cent to 4.55 per cent. Some good news is that first home buyers are back, with finance approvals to this group well up compared to the same time last year. While a relatively small buyer group, the combination of renewed first home buyer Government incentives, fewer investors and calmer prices has been a positive. This is particularly the case in Sydney where there are the greatest number of first home buyer finance approvals in almost a decade.

The post Property market update – October 2018 appeared first on .