reia news
DESCRIPTION
Edition Three - July 2011TRANSCRIPT
REIA NEWSISSUE THREE JULY 2011
THE BIG ISSUES FOR THE PROFESSION WE LOOK AT NATIONAL LICENSING THE CARBON TAX amp PROPERTY LISTING PORTALS ALSO IN THIS ISSUE
FAREWELLTO OUTGOING PRESIDENT MR AIREY
HOUSING TYPESWHAT DO AUSTRALIANS REALLY WANT
ATO COMPLIANCEKNOWING YOUR RESPONSIBILITIES
PROPERTY TAXES AND CHARGESHOW THEY AFFECT BUILDING ACTIVITY
WANT TO FIND OUT MORE ABOUT PROMOTING YOUR BRAND IN REIA NEWS
CONTACT REIA MANAGER COMMUNICATIONSRHIANNON MCCLELLAND ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU FOR FURTHER INFORMATION
I would like to welcome you to the July edition of REIA News and express how honoured I am to be your acting president until later in the year
As acting president I will take carriage of a number of important issues that the profession is currently facing and involved in
This monthrsquos edition is one of the most content-rich newsletters we have produced with a number of topical issues for the month of July
REIA along with your state and territory institutes is getting the ball rolling early with lobbying efforts in the space of national licensing As you would be aware national licensing will come into effect on 1 July 2012 however there is a lot that needs to be done before this time
REIA is calling on the government to make sure that the professionalism of the industry is not diminished in the implementation of this process Our article on national licensing will provide you with an overview what we are doing on your behalf and what you will need to do to prepare
In addition to national licensing we have detailed and clarified
what the carbon tax will mean for the real estate profession with numerous messages circulating about this new tax
This is an important issue for the real estate profession as this new tax will have implications for housing affordability and first home buyers with an estimated $5000 to be added to new homes under the scheme
A number of other important articles this month include our policy managerrsquos piece on the importance of compliance when it comes to the ATO and our research officerrsquos story on property taxes and charges and the effect these have on residential building activity
Ms Pamela Bennett REIA Acting President
PRESIDENTrsquoS REPORT
WELCOMEFROM REIArsquoS NEW ACTING PRESIDENT
Last week saw the end of an era for the Real Estate Institute of Australia with longstanding president Mr David Airey resigning as captain of the shipWestern Australiarsquos Minister for Housing Troy Buswell paid tribute to Mr Airey at a dinner held in Perth last week attended by over 40 national guests directors and REI executives
Mr Airey stepped down as president at the REIA national board meeting on June 30 after 2 years and 3 months in the role
REIA Deputy President Pamela Bennett will act in the role until
the Annual General Meeting is held in November this year
Mr Airey was elected as the WA delegate to the REIA board in 2006 He was elected deputy president in 2009 and elevated to president in April 2009 after the sudden resignation of his predecessor
He saw the REIA through a tumultuous period of change and lifted its profile with a prolific increase in media activities and appearances at industry events as well as home and property investment shows
ldquoHe saw the REIA through a tumultuous period of change and lifted its profilerdquo
Mr Airey cited travel as the heaviest burden of his term in office
ldquoOnly West Australians know how tough it is to constantly travel from Perth to the eastern capitals I have become friends with a few Qantas staffrdquo Mr Airey said jokingly
Mr Airey pointed to a resurgence in industry owned internet portals as a lsquowatch this spacersquo issue
He said there was light at the end of the tunnel with the industry challenging prices and tactics of other listing providers
ldquoI think this is the beginning of a new way that agents will do business with the major portals and it will be up to them to fight
ON THE COVER
THE END OF AN ERAREIA FAREWELLS MR DAVID AIREY
ldquothe ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo
for a better deal and stop giving away data and information to commercial providers and then being asked to pay for itrdquo he said
Mr Airey commented that the ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo and make sure that Canberra doesnrsquot make it more complicated than it needs to be
ldquoThis single issue will bring about the biggest changes in the historyof agency practice in Australia
with a national platform for educational qualifications and licensingrdquo Mr Airey added
Mr Airey said this makes great sense provided we achieve the outcomes that the REIA on behalf of Australiarsquos 70000 real estate agency employees has argued for
ldquoI am extremely proud to have been part of the REIA board over the last 5 years REIA has an exceptional board and leadership team which will continue to deal with the challenges of the profession lifting standards and ensuring that REIA becomes a better national body to represent all real estate agencies in the nationrdquo
David will continue to run his agency business in Claremont WA and continues as Deputy President of REIWA a role has held since 2006
ldquoDavid will continue to run his agency in WArdquo
ldquoREIWA is a great Institute and itrsquos a privilege to serve on its council with such a great group of councillors executive and staff all dedicated to better member servicerdquo he said
ldquoI look forward to continuing in this role with REIWA for the balance of my term of office but Irsquom really keen to get back to real estate activity and start kicking some goals in this exciting period in the property marketrdquo
In coming weeks REIA will be stepping up our advocacy over our concerns with The National Occupational Licensing System and continuing to argue for state tax reform particularly in relation to stamp duty
Many property managers value the peace of mind that comes with knowing their landlordsare adequately insured
But with different insurance covers available it can be difficult to know which types of policiesare best suited to landlordsrsquo needs
Standard building and contents insuranceStandard building and contents insurance is primarily designed for owner occupiers
A standard home and contents policy might offer insurance cover for the building whenoccupied by a tenant but is unlikely to provide cover for many actions by the tenantthat can result in financial loss for the landlord
Strata insuranceIn a strata-titled apartment situation strata insurance is held by the body corporate and paid for by ownersrsquo levies
Under most strata titles the body corporate is legally responsible for insuring the buildings at the site as well as the ownersrsquo legal liability for common property areas
However strata insurance usually doesnrsquot extend to cover the fittings landlord contents and other tenancy risks within the interior of individual units
This means that if a tenant damages the property or stops paying their rent thelandlord is likely to be left out of pocket if they donrsquot have appropriate landlord insurance in place
The landlord will ordinarily need a separate landlord insurance
policy in order to be covered for their own legal liability inside the rented apartment
Landlord insuranceLandlord insurance is specifically designed to cover landlords against actions by tenants In the case of a stand-alone building it can also cover the building itselfSome of the specific risks that landlords face are malicious damage by a tenant theftaccidental damage legal liability (as landlords) and loss of rental income
Most of these risks are specific to landlords and most arenrsquot covered by standardbuilding and contents insurance or strata insurance policies For further information visit wwwterrischeercomau or call 1800 804 016
INDUSTRY ARTICLE
INSURANCE CAN BE CONFUSINGSO LET US EXPLAIN IT
Affordable landlordsrsquo insuranceRental Protection Plus AdvantageWe know that your clients donrsquot want to think about damage to their
investment property tenants who donrsquot pay the rent or people sustaining
an injury on their property but unfortunately these things do happen
What landlordsrsquo insurance covers
^ Accidental damage covers loss by tenants to carpets curtains and internal blinds
Damage by tenants
This cover provides payments to assist your clients to repair malicious damage caused by tenants Accidental damage is covered for loss caused by tenants to carpets curtains and internal blinds
Theft by tenant
This covers theft by your clients tenant or their visitors
Loss of rent
Loss of rent covers situations where the building canrsquot be lived in after damage or loss It covers the rent your clients lose when damage caused by a previous tenant prevents them from renting out the property Loss of rent also protects your clients if their tenants canrsquot access the building in which the property is located
Rent default
Rent default is based around the tenantrsquos actions For example if they leave without notice fail to pay the rent or refuse to leave when served with eviction notices
Contents
Even if your client rents out their property unfurnished they need to consider cover for their property such as carpets internal blinds curtains light fi ttings and other furnishings for fi re theft burglary storm and water damage in addition to deliberate accidental^ and malicious damage
Liability
Covers claims made against your client for injury suffered on their property Liability includes costs awarded against your clients and any legal costs they have to pay
24hr claims hotline
In the unfortunate event that your client has to make a claim simply call our 24 hour claims lodgement hotline on 1800 105 900 to speak with one of our dedicated customer service consultants
This advertisement is a general description of cover only full details are set out in the PDS available at wwwpropertymanagersaoncomau
copy 2010 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No 241141
Apply now
1800 105 900wwwpropertymanagersaoncomau
Your client can choose higher limits if they wish Just let us know and wersquoll arrange it
RRIS
1962
021
1
A new report titled The Housing Wersquod Choose examines the housing preferences of more than 700 Sydney and Melbourne residents in a detailed survey
It found that once people took into account real-world factors such as current housing costs and their income they chose a far wider range of housing types than the stereotype of allAustralians wanting a detached home on a large block would suggest
However ldquowersquore just not building the variety of housing that Australians say they wantrdquo Jane-Frances Kelly Cities Program Director at the Grattan Institute said
In particular she pointed to shortages (compared to what we say we want) of semidetached homes and apartments in the middle and outer areas of both Melbourne and Sydney
ldquo wersquore just not building the variety of housing that Australians say they wantrdquo
The report argues that there are barriers to delivering more of the housing people say they want
These include the cost of materials and labour for buildings over four storeys land assembly and preparation and the risk and uncertainty of our planning systems
ldquothere are barriers to delivering more of the housing people wantrdquo
Building enough of the right housing is not only vital to meet the range of choices individuals would like to make but also for the way in which our cities will grow
City structure can significantly affect congestion the distance we have to travel to work and to see friends the cost of infrastructure concentrations of disadvantage and other issues vital to both our everyday lives and the health of our cities
To view a copy of the report click here
HOUSING CHOICEWHAT DO AUSTRALIANS WANT IN A HOME
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
WANT TO FIND OUT MORE ABOUT PROMOTING YOUR BRAND IN REIA NEWS
CONTACT REIA MANAGER COMMUNICATIONSRHIANNON MCCLELLAND ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU FOR FURTHER INFORMATION
I would like to welcome you to the July edition of REIA News and express how honoured I am to be your acting president until later in the year
As acting president I will take carriage of a number of important issues that the profession is currently facing and involved in
This monthrsquos edition is one of the most content-rich newsletters we have produced with a number of topical issues for the month of July
REIA along with your state and territory institutes is getting the ball rolling early with lobbying efforts in the space of national licensing As you would be aware national licensing will come into effect on 1 July 2012 however there is a lot that needs to be done before this time
REIA is calling on the government to make sure that the professionalism of the industry is not diminished in the implementation of this process Our article on national licensing will provide you with an overview what we are doing on your behalf and what you will need to do to prepare
In addition to national licensing we have detailed and clarified
what the carbon tax will mean for the real estate profession with numerous messages circulating about this new tax
This is an important issue for the real estate profession as this new tax will have implications for housing affordability and first home buyers with an estimated $5000 to be added to new homes under the scheme
A number of other important articles this month include our policy managerrsquos piece on the importance of compliance when it comes to the ATO and our research officerrsquos story on property taxes and charges and the effect these have on residential building activity
Ms Pamela Bennett REIA Acting President
PRESIDENTrsquoS REPORT
WELCOMEFROM REIArsquoS NEW ACTING PRESIDENT
Last week saw the end of an era for the Real Estate Institute of Australia with longstanding president Mr David Airey resigning as captain of the shipWestern Australiarsquos Minister for Housing Troy Buswell paid tribute to Mr Airey at a dinner held in Perth last week attended by over 40 national guests directors and REI executives
Mr Airey stepped down as president at the REIA national board meeting on June 30 after 2 years and 3 months in the role
REIA Deputy President Pamela Bennett will act in the role until
the Annual General Meeting is held in November this year
Mr Airey was elected as the WA delegate to the REIA board in 2006 He was elected deputy president in 2009 and elevated to president in April 2009 after the sudden resignation of his predecessor
He saw the REIA through a tumultuous period of change and lifted its profile with a prolific increase in media activities and appearances at industry events as well as home and property investment shows
ldquoHe saw the REIA through a tumultuous period of change and lifted its profilerdquo
Mr Airey cited travel as the heaviest burden of his term in office
ldquoOnly West Australians know how tough it is to constantly travel from Perth to the eastern capitals I have become friends with a few Qantas staffrdquo Mr Airey said jokingly
Mr Airey pointed to a resurgence in industry owned internet portals as a lsquowatch this spacersquo issue
He said there was light at the end of the tunnel with the industry challenging prices and tactics of other listing providers
ldquoI think this is the beginning of a new way that agents will do business with the major portals and it will be up to them to fight
ON THE COVER
THE END OF AN ERAREIA FAREWELLS MR DAVID AIREY
ldquothe ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo
for a better deal and stop giving away data and information to commercial providers and then being asked to pay for itrdquo he said
Mr Airey commented that the ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo and make sure that Canberra doesnrsquot make it more complicated than it needs to be
ldquoThis single issue will bring about the biggest changes in the historyof agency practice in Australia
with a national platform for educational qualifications and licensingrdquo Mr Airey added
Mr Airey said this makes great sense provided we achieve the outcomes that the REIA on behalf of Australiarsquos 70000 real estate agency employees has argued for
ldquoI am extremely proud to have been part of the REIA board over the last 5 years REIA has an exceptional board and leadership team which will continue to deal with the challenges of the profession lifting standards and ensuring that REIA becomes a better national body to represent all real estate agencies in the nationrdquo
David will continue to run his agency business in Claremont WA and continues as Deputy President of REIWA a role has held since 2006
ldquoDavid will continue to run his agency in WArdquo
ldquoREIWA is a great Institute and itrsquos a privilege to serve on its council with such a great group of councillors executive and staff all dedicated to better member servicerdquo he said
ldquoI look forward to continuing in this role with REIWA for the balance of my term of office but Irsquom really keen to get back to real estate activity and start kicking some goals in this exciting period in the property marketrdquo
In coming weeks REIA will be stepping up our advocacy over our concerns with The National Occupational Licensing System and continuing to argue for state tax reform particularly in relation to stamp duty
Many property managers value the peace of mind that comes with knowing their landlordsare adequately insured
But with different insurance covers available it can be difficult to know which types of policiesare best suited to landlordsrsquo needs
Standard building and contents insuranceStandard building and contents insurance is primarily designed for owner occupiers
A standard home and contents policy might offer insurance cover for the building whenoccupied by a tenant but is unlikely to provide cover for many actions by the tenantthat can result in financial loss for the landlord
Strata insuranceIn a strata-titled apartment situation strata insurance is held by the body corporate and paid for by ownersrsquo levies
Under most strata titles the body corporate is legally responsible for insuring the buildings at the site as well as the ownersrsquo legal liability for common property areas
However strata insurance usually doesnrsquot extend to cover the fittings landlord contents and other tenancy risks within the interior of individual units
This means that if a tenant damages the property or stops paying their rent thelandlord is likely to be left out of pocket if they donrsquot have appropriate landlord insurance in place
The landlord will ordinarily need a separate landlord insurance
policy in order to be covered for their own legal liability inside the rented apartment
Landlord insuranceLandlord insurance is specifically designed to cover landlords against actions by tenants In the case of a stand-alone building it can also cover the building itselfSome of the specific risks that landlords face are malicious damage by a tenant theftaccidental damage legal liability (as landlords) and loss of rental income
Most of these risks are specific to landlords and most arenrsquot covered by standardbuilding and contents insurance or strata insurance policies For further information visit wwwterrischeercomau or call 1800 804 016
INDUSTRY ARTICLE
INSURANCE CAN BE CONFUSINGSO LET US EXPLAIN IT
Affordable landlordsrsquo insuranceRental Protection Plus AdvantageWe know that your clients donrsquot want to think about damage to their
investment property tenants who donrsquot pay the rent or people sustaining
an injury on their property but unfortunately these things do happen
What landlordsrsquo insurance covers
^ Accidental damage covers loss by tenants to carpets curtains and internal blinds
Damage by tenants
This cover provides payments to assist your clients to repair malicious damage caused by tenants Accidental damage is covered for loss caused by tenants to carpets curtains and internal blinds
Theft by tenant
This covers theft by your clients tenant or their visitors
Loss of rent
Loss of rent covers situations where the building canrsquot be lived in after damage or loss It covers the rent your clients lose when damage caused by a previous tenant prevents them from renting out the property Loss of rent also protects your clients if their tenants canrsquot access the building in which the property is located
Rent default
Rent default is based around the tenantrsquos actions For example if they leave without notice fail to pay the rent or refuse to leave when served with eviction notices
Contents
Even if your client rents out their property unfurnished they need to consider cover for their property such as carpets internal blinds curtains light fi ttings and other furnishings for fi re theft burglary storm and water damage in addition to deliberate accidental^ and malicious damage
Liability
Covers claims made against your client for injury suffered on their property Liability includes costs awarded against your clients and any legal costs they have to pay
24hr claims hotline
In the unfortunate event that your client has to make a claim simply call our 24 hour claims lodgement hotline on 1800 105 900 to speak with one of our dedicated customer service consultants
This advertisement is a general description of cover only full details are set out in the PDS available at wwwpropertymanagersaoncomau
copy 2010 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No 241141
Apply now
1800 105 900wwwpropertymanagersaoncomau
Your client can choose higher limits if they wish Just let us know and wersquoll arrange it
RRIS
1962
021
1
A new report titled The Housing Wersquod Choose examines the housing preferences of more than 700 Sydney and Melbourne residents in a detailed survey
It found that once people took into account real-world factors such as current housing costs and their income they chose a far wider range of housing types than the stereotype of allAustralians wanting a detached home on a large block would suggest
However ldquowersquore just not building the variety of housing that Australians say they wantrdquo Jane-Frances Kelly Cities Program Director at the Grattan Institute said
In particular she pointed to shortages (compared to what we say we want) of semidetached homes and apartments in the middle and outer areas of both Melbourne and Sydney
ldquo wersquore just not building the variety of housing that Australians say they wantrdquo
The report argues that there are barriers to delivering more of the housing people say they want
These include the cost of materials and labour for buildings over four storeys land assembly and preparation and the risk and uncertainty of our planning systems
ldquothere are barriers to delivering more of the housing people wantrdquo
Building enough of the right housing is not only vital to meet the range of choices individuals would like to make but also for the way in which our cities will grow
City structure can significantly affect congestion the distance we have to travel to work and to see friends the cost of infrastructure concentrations of disadvantage and other issues vital to both our everyday lives and the health of our cities
To view a copy of the report click here
HOUSING CHOICEWHAT DO AUSTRALIANS WANT IN A HOME
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
I would like to welcome you to the July edition of REIA News and express how honoured I am to be your acting president until later in the year
As acting president I will take carriage of a number of important issues that the profession is currently facing and involved in
This monthrsquos edition is one of the most content-rich newsletters we have produced with a number of topical issues for the month of July
REIA along with your state and territory institutes is getting the ball rolling early with lobbying efforts in the space of national licensing As you would be aware national licensing will come into effect on 1 July 2012 however there is a lot that needs to be done before this time
REIA is calling on the government to make sure that the professionalism of the industry is not diminished in the implementation of this process Our article on national licensing will provide you with an overview what we are doing on your behalf and what you will need to do to prepare
In addition to national licensing we have detailed and clarified
what the carbon tax will mean for the real estate profession with numerous messages circulating about this new tax
This is an important issue for the real estate profession as this new tax will have implications for housing affordability and first home buyers with an estimated $5000 to be added to new homes under the scheme
A number of other important articles this month include our policy managerrsquos piece on the importance of compliance when it comes to the ATO and our research officerrsquos story on property taxes and charges and the effect these have on residential building activity
Ms Pamela Bennett REIA Acting President
PRESIDENTrsquoS REPORT
WELCOMEFROM REIArsquoS NEW ACTING PRESIDENT
Last week saw the end of an era for the Real Estate Institute of Australia with longstanding president Mr David Airey resigning as captain of the shipWestern Australiarsquos Minister for Housing Troy Buswell paid tribute to Mr Airey at a dinner held in Perth last week attended by over 40 national guests directors and REI executives
Mr Airey stepped down as president at the REIA national board meeting on June 30 after 2 years and 3 months in the role
REIA Deputy President Pamela Bennett will act in the role until
the Annual General Meeting is held in November this year
Mr Airey was elected as the WA delegate to the REIA board in 2006 He was elected deputy president in 2009 and elevated to president in April 2009 after the sudden resignation of his predecessor
He saw the REIA through a tumultuous period of change and lifted its profile with a prolific increase in media activities and appearances at industry events as well as home and property investment shows
ldquoHe saw the REIA through a tumultuous period of change and lifted its profilerdquo
Mr Airey cited travel as the heaviest burden of his term in office
ldquoOnly West Australians know how tough it is to constantly travel from Perth to the eastern capitals I have become friends with a few Qantas staffrdquo Mr Airey said jokingly
Mr Airey pointed to a resurgence in industry owned internet portals as a lsquowatch this spacersquo issue
He said there was light at the end of the tunnel with the industry challenging prices and tactics of other listing providers
ldquoI think this is the beginning of a new way that agents will do business with the major portals and it will be up to them to fight
ON THE COVER
THE END OF AN ERAREIA FAREWELLS MR DAVID AIREY
ldquothe ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo
for a better deal and stop giving away data and information to commercial providers and then being asked to pay for itrdquo he said
Mr Airey commented that the ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo and make sure that Canberra doesnrsquot make it more complicated than it needs to be
ldquoThis single issue will bring about the biggest changes in the historyof agency practice in Australia
with a national platform for educational qualifications and licensingrdquo Mr Airey added
Mr Airey said this makes great sense provided we achieve the outcomes that the REIA on behalf of Australiarsquos 70000 real estate agency employees has argued for
ldquoI am extremely proud to have been part of the REIA board over the last 5 years REIA has an exceptional board and leadership team which will continue to deal with the challenges of the profession lifting standards and ensuring that REIA becomes a better national body to represent all real estate agencies in the nationrdquo
David will continue to run his agency business in Claremont WA and continues as Deputy President of REIWA a role has held since 2006
ldquoDavid will continue to run his agency in WArdquo
ldquoREIWA is a great Institute and itrsquos a privilege to serve on its council with such a great group of councillors executive and staff all dedicated to better member servicerdquo he said
ldquoI look forward to continuing in this role with REIWA for the balance of my term of office but Irsquom really keen to get back to real estate activity and start kicking some goals in this exciting period in the property marketrdquo
In coming weeks REIA will be stepping up our advocacy over our concerns with The National Occupational Licensing System and continuing to argue for state tax reform particularly in relation to stamp duty
Many property managers value the peace of mind that comes with knowing their landlordsare adequately insured
But with different insurance covers available it can be difficult to know which types of policiesare best suited to landlordsrsquo needs
Standard building and contents insuranceStandard building and contents insurance is primarily designed for owner occupiers
A standard home and contents policy might offer insurance cover for the building whenoccupied by a tenant but is unlikely to provide cover for many actions by the tenantthat can result in financial loss for the landlord
Strata insuranceIn a strata-titled apartment situation strata insurance is held by the body corporate and paid for by ownersrsquo levies
Under most strata titles the body corporate is legally responsible for insuring the buildings at the site as well as the ownersrsquo legal liability for common property areas
However strata insurance usually doesnrsquot extend to cover the fittings landlord contents and other tenancy risks within the interior of individual units
This means that if a tenant damages the property or stops paying their rent thelandlord is likely to be left out of pocket if they donrsquot have appropriate landlord insurance in place
The landlord will ordinarily need a separate landlord insurance
policy in order to be covered for their own legal liability inside the rented apartment
Landlord insuranceLandlord insurance is specifically designed to cover landlords against actions by tenants In the case of a stand-alone building it can also cover the building itselfSome of the specific risks that landlords face are malicious damage by a tenant theftaccidental damage legal liability (as landlords) and loss of rental income
Most of these risks are specific to landlords and most arenrsquot covered by standardbuilding and contents insurance or strata insurance policies For further information visit wwwterrischeercomau or call 1800 804 016
INDUSTRY ARTICLE
INSURANCE CAN BE CONFUSINGSO LET US EXPLAIN IT
Affordable landlordsrsquo insuranceRental Protection Plus AdvantageWe know that your clients donrsquot want to think about damage to their
investment property tenants who donrsquot pay the rent or people sustaining
an injury on their property but unfortunately these things do happen
What landlordsrsquo insurance covers
^ Accidental damage covers loss by tenants to carpets curtains and internal blinds
Damage by tenants
This cover provides payments to assist your clients to repair malicious damage caused by tenants Accidental damage is covered for loss caused by tenants to carpets curtains and internal blinds
Theft by tenant
This covers theft by your clients tenant or their visitors
Loss of rent
Loss of rent covers situations where the building canrsquot be lived in after damage or loss It covers the rent your clients lose when damage caused by a previous tenant prevents them from renting out the property Loss of rent also protects your clients if their tenants canrsquot access the building in which the property is located
Rent default
Rent default is based around the tenantrsquos actions For example if they leave without notice fail to pay the rent or refuse to leave when served with eviction notices
Contents
Even if your client rents out their property unfurnished they need to consider cover for their property such as carpets internal blinds curtains light fi ttings and other furnishings for fi re theft burglary storm and water damage in addition to deliberate accidental^ and malicious damage
Liability
Covers claims made against your client for injury suffered on their property Liability includes costs awarded against your clients and any legal costs they have to pay
24hr claims hotline
In the unfortunate event that your client has to make a claim simply call our 24 hour claims lodgement hotline on 1800 105 900 to speak with one of our dedicated customer service consultants
This advertisement is a general description of cover only full details are set out in the PDS available at wwwpropertymanagersaoncomau
copy 2010 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No 241141
Apply now
1800 105 900wwwpropertymanagersaoncomau
Your client can choose higher limits if they wish Just let us know and wersquoll arrange it
RRIS
1962
021
1
A new report titled The Housing Wersquod Choose examines the housing preferences of more than 700 Sydney and Melbourne residents in a detailed survey
It found that once people took into account real-world factors such as current housing costs and their income they chose a far wider range of housing types than the stereotype of allAustralians wanting a detached home on a large block would suggest
However ldquowersquore just not building the variety of housing that Australians say they wantrdquo Jane-Frances Kelly Cities Program Director at the Grattan Institute said
In particular she pointed to shortages (compared to what we say we want) of semidetached homes and apartments in the middle and outer areas of both Melbourne and Sydney
ldquo wersquore just not building the variety of housing that Australians say they wantrdquo
The report argues that there are barriers to delivering more of the housing people say they want
These include the cost of materials and labour for buildings over four storeys land assembly and preparation and the risk and uncertainty of our planning systems
ldquothere are barriers to delivering more of the housing people wantrdquo
Building enough of the right housing is not only vital to meet the range of choices individuals would like to make but also for the way in which our cities will grow
City structure can significantly affect congestion the distance we have to travel to work and to see friends the cost of infrastructure concentrations of disadvantage and other issues vital to both our everyday lives and the health of our cities
To view a copy of the report click here
HOUSING CHOICEWHAT DO AUSTRALIANS WANT IN A HOME
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Last week saw the end of an era for the Real Estate Institute of Australia with longstanding president Mr David Airey resigning as captain of the shipWestern Australiarsquos Minister for Housing Troy Buswell paid tribute to Mr Airey at a dinner held in Perth last week attended by over 40 national guests directors and REI executives
Mr Airey stepped down as president at the REIA national board meeting on June 30 after 2 years and 3 months in the role
REIA Deputy President Pamela Bennett will act in the role until
the Annual General Meeting is held in November this year
Mr Airey was elected as the WA delegate to the REIA board in 2006 He was elected deputy president in 2009 and elevated to president in April 2009 after the sudden resignation of his predecessor
He saw the REIA through a tumultuous period of change and lifted its profile with a prolific increase in media activities and appearances at industry events as well as home and property investment shows
ldquoHe saw the REIA through a tumultuous period of change and lifted its profilerdquo
Mr Airey cited travel as the heaviest burden of his term in office
ldquoOnly West Australians know how tough it is to constantly travel from Perth to the eastern capitals I have become friends with a few Qantas staffrdquo Mr Airey said jokingly
Mr Airey pointed to a resurgence in industry owned internet portals as a lsquowatch this spacersquo issue
He said there was light at the end of the tunnel with the industry challenging prices and tactics of other listing providers
ldquoI think this is the beginning of a new way that agents will do business with the major portals and it will be up to them to fight
ON THE COVER
THE END OF AN ERAREIA FAREWELLS MR DAVID AIREY
ldquothe ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo
for a better deal and stop giving away data and information to commercial providers and then being asked to pay for itrdquo he said
Mr Airey commented that the ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo and make sure that Canberra doesnrsquot make it more complicated than it needs to be
ldquoThis single issue will bring about the biggest changes in the historyof agency practice in Australia
with a national platform for educational qualifications and licensingrdquo Mr Airey added
Mr Airey said this makes great sense provided we achieve the outcomes that the REIA on behalf of Australiarsquos 70000 real estate agency employees has argued for
ldquoI am extremely proud to have been part of the REIA board over the last 5 years REIA has an exceptional board and leadership team which will continue to deal with the challenges of the profession lifting standards and ensuring that REIA becomes a better national body to represent all real estate agencies in the nationrdquo
David will continue to run his agency business in Claremont WA and continues as Deputy President of REIWA a role has held since 2006
ldquoDavid will continue to run his agency in WArdquo
ldquoREIWA is a great Institute and itrsquos a privilege to serve on its council with such a great group of councillors executive and staff all dedicated to better member servicerdquo he said
ldquoI look forward to continuing in this role with REIWA for the balance of my term of office but Irsquom really keen to get back to real estate activity and start kicking some goals in this exciting period in the property marketrdquo
In coming weeks REIA will be stepping up our advocacy over our concerns with The National Occupational Licensing System and continuing to argue for state tax reform particularly in relation to stamp duty
Many property managers value the peace of mind that comes with knowing their landlordsare adequately insured
But with different insurance covers available it can be difficult to know which types of policiesare best suited to landlordsrsquo needs
Standard building and contents insuranceStandard building and contents insurance is primarily designed for owner occupiers
A standard home and contents policy might offer insurance cover for the building whenoccupied by a tenant but is unlikely to provide cover for many actions by the tenantthat can result in financial loss for the landlord
Strata insuranceIn a strata-titled apartment situation strata insurance is held by the body corporate and paid for by ownersrsquo levies
Under most strata titles the body corporate is legally responsible for insuring the buildings at the site as well as the ownersrsquo legal liability for common property areas
However strata insurance usually doesnrsquot extend to cover the fittings landlord contents and other tenancy risks within the interior of individual units
This means that if a tenant damages the property or stops paying their rent thelandlord is likely to be left out of pocket if they donrsquot have appropriate landlord insurance in place
The landlord will ordinarily need a separate landlord insurance
policy in order to be covered for their own legal liability inside the rented apartment
Landlord insuranceLandlord insurance is specifically designed to cover landlords against actions by tenants In the case of a stand-alone building it can also cover the building itselfSome of the specific risks that landlords face are malicious damage by a tenant theftaccidental damage legal liability (as landlords) and loss of rental income
Most of these risks are specific to landlords and most arenrsquot covered by standardbuilding and contents insurance or strata insurance policies For further information visit wwwterrischeercomau or call 1800 804 016
INDUSTRY ARTICLE
INSURANCE CAN BE CONFUSINGSO LET US EXPLAIN IT
Affordable landlordsrsquo insuranceRental Protection Plus AdvantageWe know that your clients donrsquot want to think about damage to their
investment property tenants who donrsquot pay the rent or people sustaining
an injury on their property but unfortunately these things do happen
What landlordsrsquo insurance covers
^ Accidental damage covers loss by tenants to carpets curtains and internal blinds
Damage by tenants
This cover provides payments to assist your clients to repair malicious damage caused by tenants Accidental damage is covered for loss caused by tenants to carpets curtains and internal blinds
Theft by tenant
This covers theft by your clients tenant or their visitors
Loss of rent
Loss of rent covers situations where the building canrsquot be lived in after damage or loss It covers the rent your clients lose when damage caused by a previous tenant prevents them from renting out the property Loss of rent also protects your clients if their tenants canrsquot access the building in which the property is located
Rent default
Rent default is based around the tenantrsquos actions For example if they leave without notice fail to pay the rent or refuse to leave when served with eviction notices
Contents
Even if your client rents out their property unfurnished they need to consider cover for their property such as carpets internal blinds curtains light fi ttings and other furnishings for fi re theft burglary storm and water damage in addition to deliberate accidental^ and malicious damage
Liability
Covers claims made against your client for injury suffered on their property Liability includes costs awarded against your clients and any legal costs they have to pay
24hr claims hotline
In the unfortunate event that your client has to make a claim simply call our 24 hour claims lodgement hotline on 1800 105 900 to speak with one of our dedicated customer service consultants
This advertisement is a general description of cover only full details are set out in the PDS available at wwwpropertymanagersaoncomau
copy 2010 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No 241141
Apply now
1800 105 900wwwpropertymanagersaoncomau
Your client can choose higher limits if they wish Just let us know and wersquoll arrange it
RRIS
1962
021
1
A new report titled The Housing Wersquod Choose examines the housing preferences of more than 700 Sydney and Melbourne residents in a detailed survey
It found that once people took into account real-world factors such as current housing costs and their income they chose a far wider range of housing types than the stereotype of allAustralians wanting a detached home on a large block would suggest
However ldquowersquore just not building the variety of housing that Australians say they wantrdquo Jane-Frances Kelly Cities Program Director at the Grattan Institute said
In particular she pointed to shortages (compared to what we say we want) of semidetached homes and apartments in the middle and outer areas of both Melbourne and Sydney
ldquo wersquore just not building the variety of housing that Australians say they wantrdquo
The report argues that there are barriers to delivering more of the housing people say they want
These include the cost of materials and labour for buildings over four storeys land assembly and preparation and the risk and uncertainty of our planning systems
ldquothere are barriers to delivering more of the housing people wantrdquo
Building enough of the right housing is not only vital to meet the range of choices individuals would like to make but also for the way in which our cities will grow
City structure can significantly affect congestion the distance we have to travel to work and to see friends the cost of infrastructure concentrations of disadvantage and other issues vital to both our everyday lives and the health of our cities
To view a copy of the report click here
HOUSING CHOICEWHAT DO AUSTRALIANS WANT IN A HOME
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
ldquothe ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo
for a better deal and stop giving away data and information to commercial providers and then being asked to pay for itrdquo he said
Mr Airey commented that the ongoing issue of National Licensing and Education is something that the REIA ldquoneeds to fight to get it rightrdquo and make sure that Canberra doesnrsquot make it more complicated than it needs to be
ldquoThis single issue will bring about the biggest changes in the historyof agency practice in Australia
with a national platform for educational qualifications and licensingrdquo Mr Airey added
Mr Airey said this makes great sense provided we achieve the outcomes that the REIA on behalf of Australiarsquos 70000 real estate agency employees has argued for
ldquoI am extremely proud to have been part of the REIA board over the last 5 years REIA has an exceptional board and leadership team which will continue to deal with the challenges of the profession lifting standards and ensuring that REIA becomes a better national body to represent all real estate agencies in the nationrdquo
David will continue to run his agency business in Claremont WA and continues as Deputy President of REIWA a role has held since 2006
ldquoDavid will continue to run his agency in WArdquo
ldquoREIWA is a great Institute and itrsquos a privilege to serve on its council with such a great group of councillors executive and staff all dedicated to better member servicerdquo he said
ldquoI look forward to continuing in this role with REIWA for the balance of my term of office but Irsquom really keen to get back to real estate activity and start kicking some goals in this exciting period in the property marketrdquo
In coming weeks REIA will be stepping up our advocacy over our concerns with The National Occupational Licensing System and continuing to argue for state tax reform particularly in relation to stamp duty
Many property managers value the peace of mind that comes with knowing their landlordsare adequately insured
But with different insurance covers available it can be difficult to know which types of policiesare best suited to landlordsrsquo needs
Standard building and contents insuranceStandard building and contents insurance is primarily designed for owner occupiers
A standard home and contents policy might offer insurance cover for the building whenoccupied by a tenant but is unlikely to provide cover for many actions by the tenantthat can result in financial loss for the landlord
Strata insuranceIn a strata-titled apartment situation strata insurance is held by the body corporate and paid for by ownersrsquo levies
Under most strata titles the body corporate is legally responsible for insuring the buildings at the site as well as the ownersrsquo legal liability for common property areas
However strata insurance usually doesnrsquot extend to cover the fittings landlord contents and other tenancy risks within the interior of individual units
This means that if a tenant damages the property or stops paying their rent thelandlord is likely to be left out of pocket if they donrsquot have appropriate landlord insurance in place
The landlord will ordinarily need a separate landlord insurance
policy in order to be covered for their own legal liability inside the rented apartment
Landlord insuranceLandlord insurance is specifically designed to cover landlords against actions by tenants In the case of a stand-alone building it can also cover the building itselfSome of the specific risks that landlords face are malicious damage by a tenant theftaccidental damage legal liability (as landlords) and loss of rental income
Most of these risks are specific to landlords and most arenrsquot covered by standardbuilding and contents insurance or strata insurance policies For further information visit wwwterrischeercomau or call 1800 804 016
INDUSTRY ARTICLE
INSURANCE CAN BE CONFUSINGSO LET US EXPLAIN IT
Affordable landlordsrsquo insuranceRental Protection Plus AdvantageWe know that your clients donrsquot want to think about damage to their
investment property tenants who donrsquot pay the rent or people sustaining
an injury on their property but unfortunately these things do happen
What landlordsrsquo insurance covers
^ Accidental damage covers loss by tenants to carpets curtains and internal blinds
Damage by tenants
This cover provides payments to assist your clients to repair malicious damage caused by tenants Accidental damage is covered for loss caused by tenants to carpets curtains and internal blinds
Theft by tenant
This covers theft by your clients tenant or their visitors
Loss of rent
Loss of rent covers situations where the building canrsquot be lived in after damage or loss It covers the rent your clients lose when damage caused by a previous tenant prevents them from renting out the property Loss of rent also protects your clients if their tenants canrsquot access the building in which the property is located
Rent default
Rent default is based around the tenantrsquos actions For example if they leave without notice fail to pay the rent or refuse to leave when served with eviction notices
Contents
Even if your client rents out their property unfurnished they need to consider cover for their property such as carpets internal blinds curtains light fi ttings and other furnishings for fi re theft burglary storm and water damage in addition to deliberate accidental^ and malicious damage
Liability
Covers claims made against your client for injury suffered on their property Liability includes costs awarded against your clients and any legal costs they have to pay
24hr claims hotline
In the unfortunate event that your client has to make a claim simply call our 24 hour claims lodgement hotline on 1800 105 900 to speak with one of our dedicated customer service consultants
This advertisement is a general description of cover only full details are set out in the PDS available at wwwpropertymanagersaoncomau
copy 2010 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No 241141
Apply now
1800 105 900wwwpropertymanagersaoncomau
Your client can choose higher limits if they wish Just let us know and wersquoll arrange it
RRIS
1962
021
1
A new report titled The Housing Wersquod Choose examines the housing preferences of more than 700 Sydney and Melbourne residents in a detailed survey
It found that once people took into account real-world factors such as current housing costs and their income they chose a far wider range of housing types than the stereotype of allAustralians wanting a detached home on a large block would suggest
However ldquowersquore just not building the variety of housing that Australians say they wantrdquo Jane-Frances Kelly Cities Program Director at the Grattan Institute said
In particular she pointed to shortages (compared to what we say we want) of semidetached homes and apartments in the middle and outer areas of both Melbourne and Sydney
ldquo wersquore just not building the variety of housing that Australians say they wantrdquo
The report argues that there are barriers to delivering more of the housing people say they want
These include the cost of materials and labour for buildings over four storeys land assembly and preparation and the risk and uncertainty of our planning systems
ldquothere are barriers to delivering more of the housing people wantrdquo
Building enough of the right housing is not only vital to meet the range of choices individuals would like to make but also for the way in which our cities will grow
City structure can significantly affect congestion the distance we have to travel to work and to see friends the cost of infrastructure concentrations of disadvantage and other issues vital to both our everyday lives and the health of our cities
To view a copy of the report click here
HOUSING CHOICEWHAT DO AUSTRALIANS WANT IN A HOME
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Many property managers value the peace of mind that comes with knowing their landlordsare adequately insured
But with different insurance covers available it can be difficult to know which types of policiesare best suited to landlordsrsquo needs
Standard building and contents insuranceStandard building and contents insurance is primarily designed for owner occupiers
A standard home and contents policy might offer insurance cover for the building whenoccupied by a tenant but is unlikely to provide cover for many actions by the tenantthat can result in financial loss for the landlord
Strata insuranceIn a strata-titled apartment situation strata insurance is held by the body corporate and paid for by ownersrsquo levies
Under most strata titles the body corporate is legally responsible for insuring the buildings at the site as well as the ownersrsquo legal liability for common property areas
However strata insurance usually doesnrsquot extend to cover the fittings landlord contents and other tenancy risks within the interior of individual units
This means that if a tenant damages the property or stops paying their rent thelandlord is likely to be left out of pocket if they donrsquot have appropriate landlord insurance in place
The landlord will ordinarily need a separate landlord insurance
policy in order to be covered for their own legal liability inside the rented apartment
Landlord insuranceLandlord insurance is specifically designed to cover landlords against actions by tenants In the case of a stand-alone building it can also cover the building itselfSome of the specific risks that landlords face are malicious damage by a tenant theftaccidental damage legal liability (as landlords) and loss of rental income
Most of these risks are specific to landlords and most arenrsquot covered by standardbuilding and contents insurance or strata insurance policies For further information visit wwwterrischeercomau or call 1800 804 016
INDUSTRY ARTICLE
INSURANCE CAN BE CONFUSINGSO LET US EXPLAIN IT
Affordable landlordsrsquo insuranceRental Protection Plus AdvantageWe know that your clients donrsquot want to think about damage to their
investment property tenants who donrsquot pay the rent or people sustaining
an injury on their property but unfortunately these things do happen
What landlordsrsquo insurance covers
^ Accidental damage covers loss by tenants to carpets curtains and internal blinds
Damage by tenants
This cover provides payments to assist your clients to repair malicious damage caused by tenants Accidental damage is covered for loss caused by tenants to carpets curtains and internal blinds
Theft by tenant
This covers theft by your clients tenant or their visitors
Loss of rent
Loss of rent covers situations where the building canrsquot be lived in after damage or loss It covers the rent your clients lose when damage caused by a previous tenant prevents them from renting out the property Loss of rent also protects your clients if their tenants canrsquot access the building in which the property is located
Rent default
Rent default is based around the tenantrsquos actions For example if they leave without notice fail to pay the rent or refuse to leave when served with eviction notices
Contents
Even if your client rents out their property unfurnished they need to consider cover for their property such as carpets internal blinds curtains light fi ttings and other furnishings for fi re theft burglary storm and water damage in addition to deliberate accidental^ and malicious damage
Liability
Covers claims made against your client for injury suffered on their property Liability includes costs awarded against your clients and any legal costs they have to pay
24hr claims hotline
In the unfortunate event that your client has to make a claim simply call our 24 hour claims lodgement hotline on 1800 105 900 to speak with one of our dedicated customer service consultants
This advertisement is a general description of cover only full details are set out in the PDS available at wwwpropertymanagersaoncomau
copy 2010 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No 241141
Apply now
1800 105 900wwwpropertymanagersaoncomau
Your client can choose higher limits if they wish Just let us know and wersquoll arrange it
RRIS
1962
021
1
A new report titled The Housing Wersquod Choose examines the housing preferences of more than 700 Sydney and Melbourne residents in a detailed survey
It found that once people took into account real-world factors such as current housing costs and their income they chose a far wider range of housing types than the stereotype of allAustralians wanting a detached home on a large block would suggest
However ldquowersquore just not building the variety of housing that Australians say they wantrdquo Jane-Frances Kelly Cities Program Director at the Grattan Institute said
In particular she pointed to shortages (compared to what we say we want) of semidetached homes and apartments in the middle and outer areas of both Melbourne and Sydney
ldquo wersquore just not building the variety of housing that Australians say they wantrdquo
The report argues that there are barriers to delivering more of the housing people say they want
These include the cost of materials and labour for buildings over four storeys land assembly and preparation and the risk and uncertainty of our planning systems
ldquothere are barriers to delivering more of the housing people wantrdquo
Building enough of the right housing is not only vital to meet the range of choices individuals would like to make but also for the way in which our cities will grow
City structure can significantly affect congestion the distance we have to travel to work and to see friends the cost of infrastructure concentrations of disadvantage and other issues vital to both our everyday lives and the health of our cities
To view a copy of the report click here
HOUSING CHOICEWHAT DO AUSTRALIANS WANT IN A HOME
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Affordable landlordsrsquo insuranceRental Protection Plus AdvantageWe know that your clients donrsquot want to think about damage to their
investment property tenants who donrsquot pay the rent or people sustaining
an injury on their property but unfortunately these things do happen
What landlordsrsquo insurance covers
^ Accidental damage covers loss by tenants to carpets curtains and internal blinds
Damage by tenants
This cover provides payments to assist your clients to repair malicious damage caused by tenants Accidental damage is covered for loss caused by tenants to carpets curtains and internal blinds
Theft by tenant
This covers theft by your clients tenant or their visitors
Loss of rent
Loss of rent covers situations where the building canrsquot be lived in after damage or loss It covers the rent your clients lose when damage caused by a previous tenant prevents them from renting out the property Loss of rent also protects your clients if their tenants canrsquot access the building in which the property is located
Rent default
Rent default is based around the tenantrsquos actions For example if they leave without notice fail to pay the rent or refuse to leave when served with eviction notices
Contents
Even if your client rents out their property unfurnished they need to consider cover for their property such as carpets internal blinds curtains light fi ttings and other furnishings for fi re theft burglary storm and water damage in addition to deliberate accidental^ and malicious damage
Liability
Covers claims made against your client for injury suffered on their property Liability includes costs awarded against your clients and any legal costs they have to pay
24hr claims hotline
In the unfortunate event that your client has to make a claim simply call our 24 hour claims lodgement hotline on 1800 105 900 to speak with one of our dedicated customer service consultants
This advertisement is a general description of cover only full details are set out in the PDS available at wwwpropertymanagersaoncomau
copy 2010 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No 241141
Apply now
1800 105 900wwwpropertymanagersaoncomau
Your client can choose higher limits if they wish Just let us know and wersquoll arrange it
RRIS
1962
021
1
A new report titled The Housing Wersquod Choose examines the housing preferences of more than 700 Sydney and Melbourne residents in a detailed survey
It found that once people took into account real-world factors such as current housing costs and their income they chose a far wider range of housing types than the stereotype of allAustralians wanting a detached home on a large block would suggest
However ldquowersquore just not building the variety of housing that Australians say they wantrdquo Jane-Frances Kelly Cities Program Director at the Grattan Institute said
In particular she pointed to shortages (compared to what we say we want) of semidetached homes and apartments in the middle and outer areas of both Melbourne and Sydney
ldquo wersquore just not building the variety of housing that Australians say they wantrdquo
The report argues that there are barriers to delivering more of the housing people say they want
These include the cost of materials and labour for buildings over four storeys land assembly and preparation and the risk and uncertainty of our planning systems
ldquothere are barriers to delivering more of the housing people wantrdquo
Building enough of the right housing is not only vital to meet the range of choices individuals would like to make but also for the way in which our cities will grow
City structure can significantly affect congestion the distance we have to travel to work and to see friends the cost of infrastructure concentrations of disadvantage and other issues vital to both our everyday lives and the health of our cities
To view a copy of the report click here
HOUSING CHOICEWHAT DO AUSTRALIANS WANT IN A HOME
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
A new report titled The Housing Wersquod Choose examines the housing preferences of more than 700 Sydney and Melbourne residents in a detailed survey
It found that once people took into account real-world factors such as current housing costs and their income they chose a far wider range of housing types than the stereotype of allAustralians wanting a detached home on a large block would suggest
However ldquowersquore just not building the variety of housing that Australians say they wantrdquo Jane-Frances Kelly Cities Program Director at the Grattan Institute said
In particular she pointed to shortages (compared to what we say we want) of semidetached homes and apartments in the middle and outer areas of both Melbourne and Sydney
ldquo wersquore just not building the variety of housing that Australians say they wantrdquo
The report argues that there are barriers to delivering more of the housing people say they want
These include the cost of materials and labour for buildings over four storeys land assembly and preparation and the risk and uncertainty of our planning systems
ldquothere are barriers to delivering more of the housing people wantrdquo
Building enough of the right housing is not only vital to meet the range of choices individuals would like to make but also for the way in which our cities will grow
City structure can significantly affect congestion the distance we have to travel to work and to see friends the cost of infrastructure concentrations of disadvantage and other issues vital to both our everyday lives and the health of our cities
To view a copy of the report click here
HOUSING CHOICEWHAT DO AUSTRALIANS WANT IN A HOME
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
The Council of Australian Governments (COAG ndash the Prime Minister Premiers and Chief Ministers) signed an Intergovernmental Agreement to establish a National Occupational Licensing System (NOLS) for specified occupations on 30 April 2009
One of these occupations is the real estate profession
The purpose of national licensing is to remove overlapping and inconsistent regulation between states and territories for the licensing of a number of occupations By so doing it aims to improve business efficiency and the competitiveness of the national economy reduce red tape improve labour mobility and enhance productivity
ldquoThe purpose of national licensing is to remove overlapping and inconsistent regulationrdquo
When national licensing commences on 1 July 2012 a licence will allow the holder to work anywhere in the country without the need for further licence applications when moving across borders Existing state and territory licences will be transferred across to an equivalent national licence on the principle of ldquono disadvantagerdquo
That is if a person is licensed to perform a certain scope of work in a particular state or territory they will be entitled to perform an equivalent scope of work anywhere in Australia under their
national licence without the need to meet further eligibility requirements
ldquoa person will be entitled to perform an equivalent scope of work anywhere in Australia under their national licencerdquo
In working towards national licensing the Commonwealth Government together with state regulators and industry representatives has been developing the following elements of a national licensing policy licence categories licence types scopes of work qualifications and other
NATIONAL LICENSINGFOR THE REAL ESTATE PROFESSION IS COMING
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
eligibility requirements and other licence characteristics (such as exemptions endorsements restrictions and conditions)
These details will be contained in a Consultation Regulation Impact Statement (RIS) which is expected to be released by the Commonwealth Government in August this year The RIS will be open to comment and a national ldquoroadshowrdquo will follow to seek responses from industry Feedback will then be considered prior to finalizing a document for the consideration of the Ministerial Council for Federal Financial Relations of COAG in early 2012 with agreement required from all jurisdictions
REIA has had a policy of supporting national licensing for the profession but
ldquoREIA has had a policy of supporting
of supporting national licensing for the profession but maintains that it is imperative that standards are not loweredrdquo
maintains that it is imperative that standards are not lowered for the sake of political expediency The REIA is adamant that the key to providing a low-risk professional service to home buyers is through mandating a high level of initial qualification and ongoing professional development
The REIA also believes that with more and more individuals having exposure to commercial real estate either directly or through their superannuation fund it is
critical that commercial agents are included in the national licensing system
The REIA has accordingly called for the Federal Government and state and territory governments to agree to a national licensing system which requires real estate agents to achieve a diploma level for licensing requires compulsory continuing professional development and requires licensing for commercial agency work
REIA News will provide further information on national licensing as details become available
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
This month the Government announced its carbon tax but with all this new information circulating in the media what will it actually mean for the real estate profession
The carbon tax legislation will be introduced in the second half of 2011 With the Government confident that it has the numbers in both Houses with the support of the Greens and three Independents the legislation should pass with implementation of a carbon tax from 1 July 2012
What will be implemented at this time is a carbon tax of $23 per tonne to be increased by 25 per cent per year until 2015 when an emissions trading scheme commences
The important points for housing and small business are
bull The implementation of a carbon tax will see the cost of construction of new housing increase by around $5000 on a new home according to initial estimates which can be expected to flow on to the price of existing homes
bull The cost of undertaking renovations for existing home owners is also likely to increase with the average kitchen and bathroom renovation estimated to rise by around 2 per cent
bull The tax will be payable by around 500 businesses however small business will not be required to pay a carbon price Small business will not have to monitor its carbon pollution or electricity use or have to fill in any forms as part of the carbon price reform
The REIA is disappointed that the Government has not had the foresight to implement any compensation for the carbon tax for first home buyers given the current state of affordability which is already at low levels
The number of first home buyers has declined to only 15 per cent of all purchasers compared to the long-run average of nearly 20 per cent
Before the announcement of the carbon tax REIA continued to lobby the Government about a review of the First Home Owner Grant to bring it into line with increases in median house prices Now we have an additional tax and no additional measures for affordability
REIA will continue to keep you up to date on this matter
CARBON TAXWHAT WILL IT MEAN FOR THE REAL ESTATE PROFESSION
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
THE NAB
ADD YOURVOICE
Australiarsquos premier small business event
Set the direction for the growth of AuStrAliArsquoS SmAll buSineSS Sector
be heArd9th AnnuAl
Add your voice
RegisteR online ndash to attend in person or as a virtual delegate (watching the event live on your computer) wwwthenationalsmallbusinesssummitcomau
silver sponsors
Dinner sponsor Breakfast amp networking sponsor
satchel sponsortechnology sponsor
Presented by gold sponsor
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Recently the Australian Financial Review reported that the property sales portal realestatecomau is increasing charges for its advertising making it more expensive for real estate agents to advertise their listings and capitalising on the information they provide (ldquoReal Estate Revolutionrdquo by Ben Hurley Australian Financial Review 23 June 2011)
REIA and the state and territory REIs are committed to making sure that the profession is getting the best value for money when it comes to listing properties and
has access to the most credible data at a reasonable price
We donrsquot feel that agents are getting this service from the REA group
PAYING TOO MUCH TO LIST PROPERTIESUSE YOUR INDUSTRY LISTING SITES
Mr Hurleyrsquos article mentions how the REA Group uses this information which it gets for nothing to provide value-added services
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
The graph to the left shows the real estate web site traffic changes during the June 2011 quarter in Western Australia
In fact there are various Institute-run property web portals around the country such as realestateviewcomau reiqcom and reiwacom where real estate agents can advertise their property listings at a comparatively low cost
So if real estate agents want to continue saving on advertising costs it is time to move and consider the alternatives offered by the real estate institutes
Members of the profession can also access credible low cost data via the REIA - visit wwwreiacomau
realestateVIEWcomau gains ground nationally
Operating in Victoria New South Wales South Australia Tasmania and Northern Territory realestateVIEWcomau has experienced phenomenal growth year on year ndash nearly doubling its audience This provides agents with a cost effective alternative to advertise and generate enquiry for listing In June 2011 realestateVIEWcomau also announced a new national partnership with BigPond collaborating on their new BigPond Money personal finance and investment site
The new partnership will see realestateVIEWcomaursquos content in the form of articles tips guides latest news and search tools integrated within the property section of the BigPond Money site
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
The Australian Taxation Office (ATO) has just announced its compliance program for 2011-12 which outlines areas that it will be focussing on
One of these areas is work related expense deductions made by real estate employees
Real estate agents as well as some other occupations have been identified as having
ldquoReal estate agents have been identified as having relatively high amounts of work-related expensesrdquo
relatively high amounts of work related expenses being claimed
Work-related expenses are expenses you incur in performing your job such as the purchase of equipment or tools expenses related to your home office and mobile phone You can claim these expenses in your tax return
However you cannot claim private expenses travel to and from work or an expense that has been reimbursed by your employer
The ATO has identified the following areas as ones where considerable non-compliance has been experienced
bull Not having detail to explain how kilometres were calculated when using the cents per kilometre method to claim travel expenses
bull Not having documentation to show when a car was owned or leased
ldquoWork-related expenses are expenses you incur in performing your jobrdquo
bull Using an incorrect code on the tax return when claiming protective clothing
bull Claiming sunglasses and sunscreen under an incorrect tax return form label
bull Incorrectly claiming self education expenses for a course that relates only in general way to your employment
bull Incorrectly claiming initial certificatelicence when only renewals are deductible
bull Not being able to substantiate excessive mobile phone claims
bull Not having diary evidence that reflects work usage of
ATO COMPLIANCEATOrsquoS COMPLIANCE PROGRAM FOR 201112
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
computerlaptop usebull Not being able to substantiate
the number of hours claimed for use of a home office
bull Incorrectly claiming meals and drinks for clients
bull Incorrectly apportioning the cost of newspapers ndash generally only the real estate section is deductible
ldquoThe ATO has identified areas where there is considerable non-compliancerdquo
In terms of record keeping if a claim is less than $300 you do not need to keep your receipts but you still need to be able to tell the ATO if asked how you worked out your claim
ldquoIf a claim is more than $300 then you need to keep written records of all your expensesrdquo
If a claim is more than $300 then you need to keep written records of all your expenses for five years
The types of records the ATO will accept include
bull Paper or electronic copies of documents like invoices
bull Receipts or delivery notesbull statements from financial
institutions such as credit card statements
bull BPAY receipt numbersbull PAYG payment summaries or
warranty documents
This article is brought to you by REIA Manager Policy Jock Kreitals Jock can be contacted at jockkreitalsreiacomau
Need further information
The ATO has a work-related expense guide available for real estate employees atwwwatogovau
The guide outlines what you can and cannot claim and provides practical examples
There are also calculators that can help calculate work related expenses
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Residential development taxes and charges are key factors that influence building activity as they add to development costs
Over the past two years building activity in Sydney has differed substantially from that in Melbourne Interestingly this difference has been accompanied by a significant disparity in the amount of development taxes and charges paid by residential developers in those capital cities
A study of national dwelling costs made by Urbis shows estimates of the amount of taxes and charges for infill and greenfield developments in Sydney and Melbourne (see table to the right)
ldquoThere is a remarkable difference in the amount paid by residential developers
There is a remarkable difference in the amount paid by residential developers for stamp duties on land local council fees infrastructure charges and land tax infrastructure charges are significantly higher in Sydney stamp duty on land and land taxes are much lower in Melbourne Although local council fees are not significant
RESIDENTIAL BUILDING ACTIVITYPROPERTY TAXES AND CHARGES
Residential dwelling-Infill
Residential dwelling-Greenfield
Sydney Melbourne Sydney Melbourne
Stamp duty Land $4578 $1609 $8208 $2699
Local Council Fees $306 $11 $1485 $39
Infrastructure charges $15000 $1609 $37300 $3693
Land tax$2971 $426 $3613 $2503
Table Charges and taxes for infill and greenfield residential developmentsSource Urbis
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
compared to other charges and taxes residential developers pay a higher amount of these fees in Sydney
This substantial difference in development taxes and charges is reflected in the value of residential work done between New South Wales and Victoria
The Australian Bureau of Statistics (ABS) figures show that the average quarterly growth rate of the value of residential work done (chain volume measure) over the period 2009-2010 was 10 in Sydney and 188 in Melbourne
ldquothe amount of taxes and charges on development might be affecting building activityrdquoWhat are the implications of this
First of all the amount of taxes and charges on residential development might be affecting building activity
Melbourne for example where the amount of some taxes and charges is lower than in Sydney has a greater growth in the value of work done for residential buildings than in Sydney where taxes and charges are higher
And secondly dwelling supply may be more responsive to demand shocks in Melbourne than in Sydney due to lower development taxes and charges in Melbourne
This might imply that an increase in demand will lead to more building rather than higher prices in those cities where property taxes and charges are lower
1The criteria for the greenfield and infill dwelling taxes and charges assessment were based on location zoning
development size lot size dwelling type characteristics proximity to services land preparation and quality of finishes
The same specifications for each criterion apply for infill and greenfield developments in order to make accurate comparisons
This article is brought to you by REIA Research Officer Johann Rojas Johan can be contacted at johannrojasreiacomau
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Industry UpdateIndustry news from around Australia
REIQ slams stamp duty legislation
The Real Estate Institute of Queensland (REIQ) has slammed the Queensland state governmentrsquos decision to remove the stamp duty home concession
From 1 August the government will remove the concession which non-first home buyers receive when buying a new or established home as their principal place of residence
In addition the government said it would also introduce a $10000 grant to people that are building or buying a new-build home or unit priced up to $600000
REIQ chairman Pamela Bennett said while the incentive to increase housing supply and create jobs in the construction sector is a positive for the economy the removal of the
stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market___________________________
REISA state budget round-up
REISA attended the State budget last month There are two important announcements for members to note
bull Land tax brackets will now be indexed in line with property price growth as determined by the Valuer General The Government will raise the land tax brackets accordingly
bull The first homeowner grant for brand new homes (newly constructed) will be phased down from $8000 to $4000 over the next financial year and then phased out in the following financial year
bull This change may affect contracts signed from 10 June 2011 - and Revenue SA has issued a circular to provide clarity
bull The $7000 First Home Owner Grant (federally funded) and its eligibility conditions remain unchanged
bull First home buyers of an
established or a new home will continue to be eligible for the $7000 First Home Owner Grant
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Making NewsGeneral national news
Australians want carbon cash spent on public transport
Almost three quarters of Australians (72) want to see revenue from a carbon tax invested in improving public transport walking and cycling according to polling conducted by Auspoll
The poll of 1500 Australians covering all age and income brackets was commissioned by a coalition of transport environment health and Local Government groups
The results were released at a Summit held in Canberra to identify transport based solutions to the issues of climate change congestion physical inactivity and population growth in major cities This poll demonstrates an overwhelming majority of Australians identify compensation
under a carbon scheme as not just handouts from the Government but also investment in measures like public transport that will make their lives better and reduce carbon emissions at the same time___________________________
Business confidence falling
A second survey in less than a week has shown Australian businesses are facing deteriorating conditions and have become increasingly pessimistic about the immediate future
The July 2011 ACCI Survey of Investor Confidence has revealed actual and expected business indicators have fallen over the June quarter The fact that business conditions have fallen to a level not seen since the survey began in 1998 shows Australian businesses are doing it tough
ACCIrsquos Greg Evans said lsquoMore exposed businesses will find it increasingly difficult to cope with further costs imposts including the proposed carbon tax and the prospect of rising interest ratesrsquo__________________________
Cash rate remains unchanged
At its meeting on 5 July the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 475 per cent The Board judged that the current mildly restrictive stance of monetary policy remained appropriate
To view REIArsquos media comment on this issue click here
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Political WatchInformation and news from government
Support line a reference for small business
According to Small Business Minister Senator Nick Sherry with the end of the financial year upon us and its usual requirements to meet many time-poor small businesses will turn to the Australian Governmentrsquos Small Business
Support Line for quick expert advice
In the past 12 months the Support Line has taken more than 18000 calls from small businesses wanting help on matters ranging from registration and licensing to starting a business legal grants and assistance and tax matters
Senator Sherry urged small businesses needing advice to make greater use of the free service The 18000-plus calls it took is a phenomenal figure in
such a short time a success in anyonersquos language - but we want more small businesses to tap into itrdquo he said
For further information about the Small Business Support Line click here___________________________
Study into local government regulation of business
The Productivity Commission will carry out the benchmarking study which will examine the costs on business of regulation within and between local government jurisdictions
ldquoLocal Government has a direct bearing on the productivity outcomes of the nation and this study will be valuable in identifying the impact of its regulatory activities on business Minister for Small Business
and Minister Assisting on Deregulation Senator Nick Sherry said
Virtually all businesses deal with local government regarding their regulatory obligations in areas as diverse as food safety to development assessment
REIA will keep you up to date with this matter__________________________
Making tax time simpler
The Commonwealth Department of the Treasury received 13 public submissions in response to its discussion paper Making Tax Time Simpler Standard Deduction for the Cost of Work-Related Expenses and the Cost of Managing Tax Affairs
To view the submissions click here
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
Political WatchInformation and news from government
Accelerated land release to make Sydney housing more affordable
NSW Premier Barry OrsquoFarrell and Minister for Planning and Infrastructure Brad Hazzard haveannounced the accelerated release of land in two Sydney growth centres to help make home ownership a reality for young families Mr OrsquoFarrell said the NSW Government was taking steps to overturn the serious housing shortage Mr OrsquoFarrell said ldquoOne of my Governmentrsquos first acts was to instruct Landcom to target the release of 10000 housing blocks within four yearsrdquo
The NSW Government has opened up the planning system to major reform involving a complete overhaul The review will be jointly chaired by Tim Moore former Environment Minister and current Land and Environment Court Commissioner
Population rate continues to slow
Australiarsquos annual population growth rate slowed to 15 for the year ending December 2010 according to preliminary figures released by the Australian Bureau of Statistics (ABS) This is down from a peak growth rate of 22 in the year ending December 2008
Australiarsquos population reached 22477400 people at the end of December 2010 growing by 325500 people over the year This is down from the previous year where the population grew by 421300 people and is the lowest growth since the year ending December 2006 when an increase of 316200 people was recorded
To view the report click here__________________________
ABS Building Approvals
The Australian Bureau of Statistics released Building Approvals Australia for May 2011 ABS Building Approvals show that the total number of dwellings approved fell 79 in May 2011 in seasonally adjusted terms after falling 03 in April
Dwelling approvals decreased for the month of May in Victoria (-185) New South Wales (-156) and Tasmania (-04) while South Australia (+57) Western Australia (+30) and Queensland (+12) recorded increases in seasonally adjusted terms
In seasonally adjusted terms approvals for private sector houses rose 07 in May
To view the report click here__________________________
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
The WorldProperty news from around the world
Washington DC outperforms the rest of the US
Recovery is coming faster for the Washington DC metro area than any other metropolitan region in the country according to a new report
The regionrsquos average real estate prices rose 44 percent over the first six months of the year according to a Clear Capital market survey The real estate data collector predicts that from July to the end of the year prices will rise by another 28 percent
The strength of the DC market contrasts with the story for the rest of the country where prices continue to trend downwards
Across the United States prices sank in the first six
months by 32 percent Clear Capital noted that despite the continuing negative trajectory there is less price volatility in 2011 than last year
In the report the worst-performing major real estate market was in Virginia Beach Clear Capital said that persistently high unemployment has kept prices on the decline Values are projected to drop there by 86 percent in the second half of 2011___________________________
RBI calls for banks to tighten commercial lending
The Reserve Bank of India (RBI) has asked banks to go slow on lending to the commercial real estate sector The regulator fears an asset price bubble
The RBI advisory comes in the backdrop of a sharp increase in lending to commercial real estate projects in the last one year and non-performing asset (NPA) growth in the sector staying higher than the growth in overall loan delinquencies_________________________
Taiwan to ease investment rules in China
Taiwan will lift some of its restrictions on Taiwanese property developersrsquo investments in China in a bid to help the islandrsquos real-estate companies expand more quickly than its fast-growing neighbour
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU
REIA NEWS
IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA FOR
FURTHER INFORMATION ABOUT ADVERTISING PLEASE CONTACT REIA MANAGER
COMMUNICATIONS ON 02 6282 4277 OR AT RHIANNONMCCLELLANDREIACOMAU
16 THESIGER COURT DEAKIN ACT 260002 6282 4277 I WWWREIACOMAU