» property investors

Proposed stamp duty changes in NSW and what they mean for residential investors

BMT team — Sun, 07 Mar 2021 22:29:43 +0000

The New South Wales 2020-21 budget announcements included a number of measures aimed at boosting the economy. One of which was the first major stamp duty reform in over 150 years. Stamp duty in New South Wales was introduced in 1985 – a time when property prices were much lower, and people moved around less. With this in mind, many argue that the current policy is outdated and does not serve its original purpose in the world we now live. But what do the proposed stamp duty changes mean for residential investors in New South Wales? What is the proposal and what does it mean for investors? Before we get started, it’s important to note that this change is still a proposal and subject to change following community feedback. But for the sake of this discussion, we will consider what it currently means for investors. The current proposal will give those looking to buy a home two options: 1. Pay stamp duty upfront and ongoing land tax (i.e. the current compulsory arrangement) 2. Pay an ongoing annual property tax These options are available for everyone looking to buy a residential or commercial property, including investors. The rate of the property tax changes between the groups, so the tax rate for an owner-occupier won’t be the same as it would be for an investor. What does this mean for residential investors The current proposal is available for property purchased for residential owner-occupiers, investors, primary producers and commercial owners. The proposal includes a rate framework, where the property tax rate changes depending on the purpose of the land. The suggested annual property tax rate for investment properties is as follows. $1,500 + 1 per cent of the unimproved land value Investors will still have a choice. One of the biggest drawcards for investors is that the proposed annual property tax will be tax deductible in the financial year it’s paid. While currently land tax is also tax deductible, stamp duty isn’t directly. Stamp duty is classed as a capital cost. This means it isn’t a deductible expense but is instead included in the property’s overall cost base. Case study – proposed stamp duty reform Martha is a first-time property investors and is deciding whether she will go down the traditional path of stamp duty and land tax or pay the new property tax. She has a relatively short investment strategy and wants to sell the property in four years’ time, based on the market growth. Therefore, her overall aim is to go with the option that will save her money at the very beginning when her financial outlay is higher. The table below shows the scenario of both options Martha decides to go down the property tax route. This resulted in a first-year cost of $6,600, instead of paying upfront stamp duty of $33,585. Over the four years of ownership, the total property tax payable would be $27,593. She will also benefit from claiming property tax as a deduction each financial year. BMT Tax Depreciation is here to help you in every stage of your property investing journey. The BMT team works with you, your accountant and your property manager to ensure you claim the most depreciation deductions possible. To learn more about BMT, Request a Quote or call the team on 1300 728 726.

The post Proposed stamp duty changes in NSW and what they mean for residential investors appeared first on .

2019 New Year’s resolutions for property investors

BMT team — Tue, 01 Jan 2019 22:10:02 +0000

Plenty of people make New Year’s resolutions, most commonly to lose weight, to change jobs, to buy their first investment property, to buy their third investment property, to achieve previous goals that remain unconquered. Within a week or two we usually fall back into old habits and quietly forget we decided to make a change at all. Make 2019 your year Even when things in our lives are on track, we all have room for improvement, property investors included. The key to making a New Year’s resolution is remembering the change will have an effect somewhere down the road. Even the small, minor adjustments we want to make in our day-to-day lives can be huge and a small change in our thinking or a small declaration can make 2019 a big year for property investing. Reassess your long and short term investment goals The New Year is a great time to take a look at your goals. If you’ve found yourself off track, you can plan to get where you want to be by revising your short-term goals. Meeting with a Financial Advisor at the beginning of the year can also be of benefit. After investing for some time, you may find that your long-term investment goals have change. Even if they haven’t, the New Year is the perfect time for property investors to evaluate their current situation and plan for the year ahead. Improve your investment portfolio Is 2019 the year to expand and diversify your property portfolio? Or perhaps you found your niche in 2018 and need to sell properties which no longer suit your needs? Either way, start 2019 by consciously planning how you want your property portfolio to evolve this year. Commit to learning something new Over the course of the year, it’s easy to get wrapped up in your own investments and not keep abreast of what’s happening in the market that could have an impact. In 2019, dedicate yourself to staying informed on what is happening in the area where your property is based. There are also many resources out there you could use to improve your investing knowledge from books, blogs, magazines and online resources to information nights and investing courses. Our Research and Insights tab within MyBMT is the perfect place to stay informed to help guide your investment strategies. Focus on being disciplined in 2019 Make one of your New Year’s Resolutions to be more disciplined with your property investments. Plan better, get more organised and work on clearly communicating your needs and future vision. Where can you make improvements? It could be as small as getting a new Financial Planner or it could be as big changing your approach and property plan entirely.

The post 2019 New Year’s resolutions for property investors appeared first on .

Christmas tips for property investors

BMT team — Tue, 18 Dec 2018 22:51:52 +0000

The last week before Christmas is a great time to look at how your investment property has fared over the past year. This can be a great opportunity to ascertain what’s working against what might need to change. Have your tenants given notice? Use vacant periods to do repairs or maintenance. If you have been waiting to do some work or give your property a fresh coat of paint, the Christmas/New Year period can be a great time to do it if your tenants are planning to vacate or be away on holidays. Renovating or adding improvements to your investment property may give you the opportunity to claim depreciation through capital works deductions. A simple example could be replacing the kitchen cupboards. If any plant and equipment assets are removed and replaced, for example an air conditioner, this will also be considered a capital improvement. Investors considering completing any work to their property should contact a specialist Quantity Surveyor for advice before they start work. To discover what can be claimed for any investment property, simply request a quote online or speak with the expert team at BMT on 1300 728 726. Christmas break availability If your tenants aren’t vacating, it’s important that you remain available for them to contact you or your Property Manager over the Christmas period. The last thing you want to do is come back from holidays with a stack of complaints and an unhappy tenant who is feeling neglected. If you’re planning on going away, it’s courteous to let your Property Manager and the tenant know so they remain informed. Christmas decorations Make sure your tenants know what sort of decorations are allowed. Are you happy for them to decorate the roof? Nail a wreath to the front door? Put lights up around the outside the house? Install an inflatable snowman on the front lawn? Don’t sweat the small stuff. Blu Tac marks on the walls from holding up decorations are all part of general wear and tear and might be worth it if you’ve got happy, reliable, long-term tenants who treat your property as if it were their own home. Managing your Property Manager Christmas is the perfect time to review your Property Manager’s performance over the past year. Have they kept you informed? Do they respond to your enquiries promptly? Is their performance consistent? Do they keep you regularly updated on income versus expenses? If you don’t have a Property Manager, why not review your own performance and weigh up whether being a landlord is worth all the extra work. Landlord insurance As much as you prepare, some things are beyond your control and you could end up with damage to your property, whether it’s from thieves breaking in or Rudolph chewing on your sofa. Property is usually the single largest investment you will make in your lifetime. BMT Insurance works with some of Australia’s most experienced providers to find the appropriate level of insurance cover for you. Let BMT find the right landlord insurance that works best for you and your investment. Review your loan The holiday season is a great time to sit down and re-think your finances before the New Year. Take a look at your home loan and lender and see whether it is still the best option for you. You may find you have different goals in 2019. Organise a depreciation schedule The additional cash flow depreciation provides can be handy come Christmas time. In addition to reducing your holding costs, this money can also be used to save for necessary repairs and maintenance, planned renovations, additional properties or even for personal use such as a holiday away with the family or for presents to place under your Christmas tree. Ensure you are maximising your cash flow by speaking with a Quantity Surveyor and requesting a depreciation schedule.

The post Christmas tips for property investors appeared first on .