Stamp duty on home loans under review

STAMP duty on housing loans could be abolished after the Henry tax review, which is likely to recommend states be given a share of income tax to make up the difference.

The most likely path to do this would be for the Commonwealth to give the states the ability to impose their own surcharge on income tax, which would be collected for them by the Australian Tax Office.

 The Henry review has been inundated with submissions calling for the end of stamp duty.

Tax economists argue that the tax on moving house, although easy to collect, leads to poor use of the housing stock and poor labour mobility, The Australian reports.Having to pay stamp duty not only discourages elderly people from moving to more appropriate accommodation, it also deters people from moving house to a better jobs market. 

At a conference conducted by the Henry tax review at the Melbourne Institute last week, both international and Australian tax economists said stamp duty should go, with Melbourne University professor John Freebairn describing the tax as “a piece of garbage”.

The review panel is being influenced by state submissions arguing that replacing stamp duty by extending other state taxes, such as payroll tax or land tax, would be too difficult to implement nationally.

Tasmanian Treasury secretary Don Challen, who is close to the inquiry’s head, federal Treasury secretary Ken Henry, told last week’s conference that reform of state taxes would succeed only with leadership from the national government.                                                                                                                                                     

“If you want to achieve a difficult reform, you’ve got to make it a national one,” Mr Challen said.

He said it would be too hard to win political consensus to extend land or payroll taxes.

“It requires eight lots of political commitment and eight lots of legislation and that path is doomed to failure,” he said.

However, he said he believed states would be willing to act on stamp duty if the commonwealth provided an avenue for alternative revenue.

The idea of giving states a cut of income tax was pressed two years ago by the OECD, which suggested the states “piggy-back” on income tax. The OECD also urged states to drop stamp duty.

One of the world’s leading experts on federal taxes, Canada’s Richard Bird, said the states were heading for a financial crisis because they did not have a sufficient tax base to support their burgeoning health and education costs, which were all rising much faster than the consumer price index.

One of the problems with stamp duty for the states is that it is vulnerable to the state of property markets.

Stamp duty usually raises about $14 billion a year for the states, but the recent state budgets showed big falls of more than $1bn each in NSW and Queensland, in 2008-09, for example.

“In Australia, it should certainly be feasible to permit states to impose a surcharge on the federal personal income tax base,” Professor Bird said.

He said that, ideally, Australia would follow the Scandinavian practice of allowing states to have a flat tax surcharge on income, rather than mirroring the commonwealth’s progressive taxation.

The states would be allowed to set their own level, making states more responsible for their own finances.

Source  :  www.news.com.au

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House prices tipped to lift by 2012

HOUSE prices could rise by as much as 22 per cent during the next three years, an economic forecaster says.  

”The conditions are ripe for a sustained recovery in residential property prices,” according to BIS Shrapnel’s Residential Property Prospects, 2009 to 2012, report.

”Low interest rates, solid growth in rents and housing shortages are evident in most markets.

”However, the current economic malaise will mean confidence will only recover slowly during 2009/10.”

BIS Shrapnel senior project manager and study author Angie Zigomanis said that, at this stage, all of the action was occurring at the lower-priced end of the market.

This is due to a surge in first-home buyer demand as a result of the federal government’s first home owner boost scheme and low interest rates, he said.

BIS Shrapnel forecasts there will be 180,000 first-home buyers in 2009.

Although first-home buyer demand was expected to ease after the expiry of the government’s boost scheme at the end of 2009, upgraders and investors were expected to take the baton, Mr Zigomanis said.

”We expect rising confidence in the prospects for an economic recovery in 2010, so investors are likely to return in greater numbers, attracted by increased rental returns and low interest rates.”

Among the state capitals, Sydney, Melbourne and Adelaide will show the strongest price growth over the next three years, at 19 per cent.

More moderate growth is expected in Brisbane, Hobart, and Canberra, while price growth in Perth and Darwin is expected to be weak as the local economies of these cities are impacted by a decline in investment spending in the resources sector.

BIS Shrapnel estimates Sydney’s median house price at June 2009 to be $530,000, and predicts it will rise by mid-2012 to $630,000. Melbourne’s current median house price is estimated at $425,000, rising to $507,000 by June 2012.

In Adelaide, the median price is estimated at $360,000 and predicted to climb to $430,000 over the three years.

Among other cities around Australia, Newcastle and Wollongong are expected to benefit from the migration of residents from Sydney over the coming years.

The median house price in Newcastle is expected to soar 22 per cent over the three years, while Wollongong is forecast to see growth of 20 per cent in the same period.

In Brisbane, the average house is estimated to cost $391,000 now and is expected to cost $455,000 by mid-2012, an increase of 16 per cent.

Hobart’s median house price is estimated to be $335,000 and will rise by 15 per cent to $385,000 over the three year period.

An average house in Canberra is estimated to cost $440,000, increasing to $515,000 by 2012, a rise of 17 per cent.

In Perth, the estimated median house price is $425,000, expected to reach $475,000 in three years, up 12 per cent.

Darwin’s forecast median house price is $470,000, predicted to show an increase of 11 per cent over the three years.

For the Gold Coast, the Sunshine Coast and Cairns, BIS Shrapnel forecasts prices will increase by 14 per cent, while Townsville prices are expected to grow 13 per cent over the three years.

Source  :  www.news.com.au

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A Boost for the Housing Industry

The residential construction industry has been assisted by growth in the first time home-buyer activity along with the low interest rate.

Home builders are offering some competitive priced housing, and in the last few months things have started to pick up as we see with the display homes traffic which has increased by around 1000 more visitors a week compared to the same period last year.

With the growing concerns of the recession, some homebuyers are investing in the single storey home which is allowing them to lower their debt, rather than building the two storey home.

The Commercial developments throughout Perth have slowed down, but the ones with less financial risk attached to them are still going ahead.

What is happening is there is a  big demand for the first home buyer homes, therfore a lot of  houses being sold are at this price range therefore bringing down the median house price. 

There are also alternative financing options in WA such as the WA Governments Keystart Home Loans which has helped a lot of new home owners get on the property ladder.

Activity in the residential construction is providing  jobs at time when needed.

The first homebuyer’s stimulus is moving through two stages this year  :

From now until October 1, 2009  $21,000 on a house and land package, or a new house built that  has not been lived in.

$14,000 for an established home.

From October 1 until December 31, 2009 the boost will be lowered to  :

$14,000 for a house and land package, or a new built house that has not been lived in.

$10,500 for an established home.

From January 1, 2010 is to be confirmed.

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Rent a Holiday Home in Perth

CLICK HERE TO VISIT RENTAL PROPERTY WEBSITE

Set in the quiet residential neighbourhood of Mindarie, this picturesque house is only a minutes walk from a beautiful park and playground, 10 minutes stroll from the lively bars and restaurants found along the boardwalk at Mindaire Marina, and a quick 2 minute drive from door to shore.

What makes this house different, and so much better, than all the other rental properties out there today? Simple. It’s not just a rental property, it’s a home. And because it’s lived in, it will offer you exactly what you’ll be missing when you first touch down in Perth – all of the creature comforts that will make you feel at home.

So whether you are looking for somewhere to stay for your beach side holiday, or just a place to park your suitcases when you first arrive, this house might be just what you’re looking for – the perfect to unwind, relax, explore and settle into a new life in Perth.

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Green Built Homes Perth

With more people, not only in Australia but around the world becoming aware of our negative impact on the environment change is coming fast.

• There are increasing responsibilities for governments and businesses on a global stage                                       
• Governments are changing legislations
• Businesses are making changes
• People may soon be responsible for their individual carbon footprint
• Green build homes are no longer a dream of hippies

If you are building a new home, now is the time to make a difference and to be sure your new home is built to emit a low carbon footprint.
Making this choice now not only lessens the impact you have on the environment, it also saves your hip pocket.

Green built homes are solar passive in their design. They reduce heating and cooling costs, use less resources and save you money.
Alternative Living’s solar passive home designs encourage:

• the sun’s natural light to comfortably heat and cool your home
• cross ventilation though design layout and positioning
• a naturally occurring comfortable living space through the use of a thermal mass in the slab of our home designs; reducing extremes in temperature
• Use compact fluorescent lighting through our entire range of eco-friendly homes, using a staggering 1/5th of the electricity of normal lighting.
• www.alternativeliving.com.au

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Millionaire Eileen Bond selling Peppermint Grove home

 

WHILE the plunge in western suburbs property prices is common knowledge, at least one prominent millionaire is willing to test the waters.

 

Eileen Bond, ex-wife of businessman Alan Bond, wants to sell one of her plush Peppermint Grove homes. 
The View St mansion, which is on the market for $6.35 million, has been used as a guesthouse for “Big Red’s” family and friends since she moved to Leake St to live behind her daughter, Jody, three years ago.

Real estate agent William Porteous said Ms Bond was downsizing and looking for something more practical.

Her daughter lives in another part of Peppermint Grove and so she bought a house directly behind her daughter’s which is just more practical for their day-to-day lives,” he said.

Jody Fewster lives with her husband, Damian, and their two sons, aged six and 10.

Ms Fewster said they had always been a close family.

We even lived in View St with her for a short time when we first came back from Sydney; it’s a fantastic house, she said.

Ms Fewster said her house was attached to her mother’s through an adjoining room and gymnasium.

We love having mum here, we have a ready-made babysitter, she said. Ms Fewster said the View St home held precious family memories.

I really miss the tennis court there, she said. At Christmas we’d all be out there playing cricket under the lights.

The classic Italianate residence has four bedrooms and four bathrooms, and a marble ensuite to the master bedroom.

It also has a swimming pool and a two-storey foyer, and is on a 1500sqm block.

Source  :  www.news.com.au

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First-homebuyers urged to take mortgage help on board

An innovative house and land finance package developed in Perth could help more first-homebuyers to secure a home loan reduce their loan repayments. 
  
Based on a four-bedroom, two-bathroom home using part of the home as a rental, therfore allowing first-homebuyers  to afford a buy, part of the home is sealed off from the rest, creating a rentable one-bedroom, one-bathroom home.
  
The rent is taken into account when assessing borrowing capacity and surplus income can be used for bigger mortgage repayments.
  
Housing Edge director Dennis Ward-Fay said the new approach would bring home ownership within the reach of many more first-homebuyers.    
  
“Every application has to be assessed on its own merits but as an example the top four banks would require a couple borrowing for a house and land package valued at $380,000 to be earning an average salary of $63,275. The same couple applying for a Housing Edge loan would require a combined salary of only $56,510.
  
“The home can easily be converted back to a standard four-bedroom, two-bathroom home at a later date if the owners wish,” he said.
 
Homeowners are advised to use a property manager to handle the rent collection and tenancy details.

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Arthur Marshall selling his home in Mandaruh

FORMER politician and tennis ace Arthur Marshall is selling his Mandurah canal home to move back to the city. 

The one-time TV sports commentator and father of Channel 9 newsreader Dixie Marshall said his house of 10 years was “on the best block on the canal” because of its dual water views.

“From a canal’s point of view it is on what is called a T-junction. You look right, left and ahead and all you have are water views,” he said.

With an estuary to the west and the canal to the east, every room in the home has a water view.

Two studies, a bedroom and the open-plan lounge, dining and kitchen are on the ground floor.

Tall windows reach to the second storey, allowing breathtaking water views. A wide entertaining area leads to a private jetty.

There are three bedrooms upstairs, including the master with ensuite, walk-in robe and balcony overlooking the canal.

The other bedrooms have built-in robes and a shared main bathroom.

A lounge with a balcony makes it ideal for guests or a teenagers’ retreat.

“I asked the architect to make it feel like you were on a ship and when sitting in the lounge upstairs, it is just like it, with water everywhere,” Mr Marshall said.
The home has airconditioning, an alarm and double lock-up garage.

“One of the best things is the huge reserve next to the house,” Mr Marshall said. “Not only is it great to kick a footy with the grandkids and go for a walk, but it allows for plenty of visitor parking.”

72a Waterside Drive, Dudley Park
$1.95 million
Four-bedroom, two-bathroom canal home with water views, open-plan living area, upstairs lounge and private jetty.
Agent: Peter Lindsay 0429421942, Elders Real Estate Mandurah 95359111

www.news.com.au

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Buliding your dream home

When choosing your land and house package think carefully on how you live before choosing the right house for you.         

Make sure the floor plan fits the way you live.

Design your house for you and your life style, you’d be surprised at how many houses don’t fit the way people really live.

I remember when people actually used their living rooms and wouldn’t have dreamed of sitting in the kitchen, much less thinking of it as the centre of the house now 

But that’s exactly what’s happened over the last three decades.  Other changes have occurred too: home offices have become increasingly important, as have master bedrooms, en suites, activity rooms, alfresco’s and pools.

 Any well-designed house must be functional ,  people define their space needs as ‘informal and formal’ or ‘public and private’ rather than thinking of their plan as a series of rooms.

 So think about the way you really live, design your floor plan accordingly, and you’ll be taking the next step towards a well-designed house.

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Trading places on the net

Two WA businesses have joined forces to resurrect the 80s trend of home trading to give today’s buyers a new approach in the tough economic climate.
  
Tradehomes.com.au launched last week, in conjunction with OrangeTee Real Estate, to offer a forum where sellers can advertise their properties and negotiate an equal trade for other property, cash or any item with an asset value.
  
Common trade items include houses, land, vehicles, boats, gold, gems, stocks, bonds and jewellery, providing the traded assets total the value of the property’s price.
  
Trade Homes Australia director Kara Tripp said the service was nothing new but was giving a new breed of buyers and sellers a fresh option in a difficult market.
  
“At the end of the day, trading has always been going on behind the scenes, with people exchanging properties for properties etc; we are just creating a forum for people to do it,” Ms Tripp said.
  
“It is getting harder for some buyers to get finance so it is just thinking outside the box. If they have other assets, such as a boat, it is essentially turning that into property.” 
   

OrangeTee Real Estate was theexchanging properties for properties, providing support for traders at the negotiation and settlement stages.
  
“A lot of people get quite daunted when it comes to negotiating deals, so we thought it would be helpful to have experienced real estate agents on board, for people who like the idea but are not comfortable doing it themselves,” Ms Tripp said.
  
So far, one deal has involved the trade of an apartment for assets that included gemstones and gold.
  
REIWA president Rob Druitt said the practice was fine as long as it was well managed and researched, with all parties seeking the appropriate valuation and advice before entering into discussions.

 

LOUISE BAXTER  www.thewest.com.au

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