Apartment buyers in New South Wales are set to gain a decade of insurance-backed protection against major building defects, after the NSW Parliament passed the Fair Trading and Building Legislation Amendment Bill 2026.&nbsp;

The Bill establishes decennial defect insurance, known in the market as Latent Defects Insurance (LDI), as an alternative to the existing two-year strata building bond. It cleared the Legislative Council with amendments on Tuesday evening (August 4, 2026), with the Legislative Assembly agreeing to those amendments shortly after.

Under the reform, eligible developers can satisfy their statutory bond obligation by taking out an approved decennial-style policy that gives owners 10 years of cover for major structural defects from completion, claimable directly, without first having to pursue developers or builders through costly legal action.&nbsp;

The change forms the final tranche of amendments arising from the 2021 statutory review of the Strata Schemes Management Act 2015 and related legislation.

Resilience Insurance, which originated the cover in Australia and has delivered it in NSW since 2022, welcomed the passage and credited the NSW Government for delivering it.

“This is protection apartment buyers have needed for a long time, and the credit for delivering it belongs to the NSW Government,”&nbsp;said Corey Nugent, CEO of Resilience Insurance.

“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into. Reform like this is what good, evidence-based regulation looks like.”

Resilience has delivered LDI in NSW since 2022, protecting thousands of apartments, giving the State, and now the country, real-world evidence of how decade-long, no-fault protection works in practice.

The reform also places NSW within a wider national shift.

NSW is the third jurisdiction to put decennial cover into law. The ACT legislated for it in 2024, with the scheme taking effect in late 2025, and Victoria passed its own framework on 17 June. Between them, the three cover the majority of Australia's apartment market.

The reform commences once the legislation is proclaimed, which is expected in the coming weeks. From that point, developers of Class 2 residential apartment buildings can meet their statutory obligation with an approved decennial policy in place of the bond.

Buyers who purchased into projects that took out the cover early are among the first in the country to take keys to apartments carrying decade-long structural protection.

“With the legislation passed, the focus now turns to making it work for buyers,”&nbsp;Nugent said.

“There are already thousands of apartments in NSW covered by this insurance, bought by developers who moved early. The question every buyer should be asking in a display suite is a simple one: does this building come with 10-year defect cover, and who stands behind it?&nbsp;

“We look forward to working with the Government and the Building Commission in coming weeks as the framework moves to implementation, and to sharing what we have learned over the past four years so the protection reaches owners as smoothly and quickly as possible.”

Other states are working through their own reform programs. Western Australia has indicated that decennial cover is within consideration a later stage of its reform sequence, and Queensland has been examining the settings as it looks at the development pipeline ahead of the 2032 Olympics.

Resilience Insurance acknowledges the NSW Government’s continued focus on strengthening consumer protection while supporting housing delivery across the State.

Fast Facts: What the reform means

<ul style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Proven at scale:&nbsp;Decennial cover has operated in NSW since 2022, protecting thousand of apartments.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">10 years of cover:&nbsp;Protection for major structural defects runs for a decade from completion, claimable directly and with no legal action required.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">An alternative to the bond:&nbsp;Eligible developers can meet their statutory obligation with an approved decennial-style policy in place of the 2% strata building bond.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Part of a national shift:&nbsp;The ACT has had decennial provisions in force since 2025 and Victoria passed its framework in June. NSW now joins them.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">No-fault, first resort:&nbsp;Owners corporations claim directly from the insurer without first having to establish who is liable for the defect.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Cost-competitive:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the 2% bond while offering broader, longer protection.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market position:&nbsp;Resilience originated LDI in Australia and has delivered it in NSW since 2022.</li>
</ul>

Fast Facts: What is Resilience LDI?

<ul style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Resilience Latent Defects Insurance (LDI):&nbsp;Covers major structural defects for 10 years from completion.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Consumer-first:&nbsp;Direct claim access, no need for lengthy legal action.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Cost advantage:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market leader:&nbsp;&nbsp;Resilience Insurance originated LDI in Australia and is the national market leader.</li>
</ul>

Joel Robinson

NSW parliament passes 10-year defect insurance laws for new apartment buyers

Builder-developer <a href="https://www.apartments.com.au/developers/mcnab-developments">McNab</a> has wasted little time reshaping one of South Brisbane's most significant undeveloped apartment sites after acquiring the property earlier this year.&nbsp;

McNab has lodged plans to scrap an existing approval for two 30-storey towers and instead deliver a single 28-storey residential building, preserving part of the site for a future development opportunity.

The proposal, lodged over <a href="https://www.apartments.com.au/new-apartments/64-peel-street-south-brisbane-qld-4101">64 Peel Street and 9 Cordelia Street</a>, is for a residential-led mixed-use development comprising 124 apartments above a landscaped podium, alongside a boundary realignment that preserves part of the land for a future residential project.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="743bf564-3f8f-45fc-b8d3-bbf18f5b628f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20Peel%20st%20podium.png?VersionId=EhCxGrVn_VFH3qTbKnI4WppGwaMnOn0t" />

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a>, the development will deliver 119 two-bedroom and five three-bedroom apartments across 23 residential levels. A five-level podium will accommodate 135 car spaces, while the ground floor will include a 66 sqm commercial tenancy, an activated residential lobby with work-from-home spaces, and a publicly accessible landscaped plaza linking Cordelia and Peel streets.&nbsp;

Communal amenities will span Level 6 and the rooftop, including indoor and outdoor recreation spaces, a swimming pool, barbecue facilities, kitchen and dining areas, lawn space, sauna, steam room and yoga facilities.

The application also proposes a boundary realignment to create a standalone 1,290 sqm development lot while retaining an adjacent parcel for future redevelopment, allowing the balance of the site to contribute additional housing over time.

Hayball said the architecture has been shaped by the site's elevated corner position at the intersection of Peel and Cordelia streets and Brisbane's subtropical climate.

The design incorporates generous landscaped setbacks, a masonry podium wrapped with planting, large north-facing balconies, and a slender tower profile intended to maximise natural light, cross ventilation and long-range views. The rooftop has been conceived as a wellness-focused retreat overlooking Brisbane, with amenities positioned to capture views towards Mount Coot-tha and the CBD.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="c5f99e84-6ad8-4a87-82d1-869685b754d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20tower%20perspective.png?VersionId=Gw0IuJaSAlk.tvGBxInhZOcQAdIB..2b" />

The planning submission positions the proposal as a response to both changing market conditions and Brisbane's Kurilpa Sustainable Growth Precinct planning reforms.

McNab acquired the site after the previous approval was granted, with the existing scheme no longer reflecting current residential market demands, economic conditions, construction challenges, construction efficiencies or the quality of development outcome now being pursued, the planning report noted.

McNab continues to expand its residential development pipeline across Brisbane and the Gold Coast. The developer recently launched The Tannery in West End, securing more than 60 per cent of apartments before the project's public release. It is also delivering Elements Budds Beach in Surfers Paradise and Lucia Highgate Hill, an eight-apartment boutique development overlooking the Brisbane River.

McNab resets decade-old South Brisbane approval with 124-apartment tower

A steeply sloping Bellevue Hill site is set to accommodate a new mid-rise apartment development, with plans lodged for 20 homes that respond to the site's dramatic topography.

The proposal for the consolidated land at <a href="https://www.apartments.com.au/new-apartments/138a-140-bellevue-road-bellevue-hill-nsw-2023">138A-140 Bellevue Road</a> has been designed by Sydney architecture practice Common Office, which has used the site’s substantial fall to distribute the building’s scale and unlock 20 apartments without presenting the full height to the street.&nbsp;

“The unique design strategy leverages the site’s substantial topographical fall to facilitate increased density, presenting a seven-storey profile to Bellevue Road while rising to 10 storeys at the rear,” Common Office said in its architectural design report.

The apartment mix spans one, two, three- and four-bedroom residences. Four two-bedroom apartments are designated as affordable housing, while the plans also include two adaptable dwellings. The mix is majority three-beds, with the typical three-bed apartment offering around 144 sqm internally, with balconies of around 15 sqm.

The affordable housing component represents 15 per cent of the residential floor area and allows the project to access additional height and floor space under the NSW Government’s in-fill affordable housing provisions. The site also falls within the inner area of the Low and Mid-Rise Housing Policy because it is within 400 metres walking distance of Double Bay Town Centre.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="b1230d0f-3bfa-4a11-abaf-0928c66ef345" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da.png?VersionId=dZeMK3P.OutGjN8ycjsxm8uNsj_QFWQv" />

Common Office has arranged the building around a masonry podium and a lighter upper volume, drawing on two recurring elements of Bellevue Hill’s established architecture: sandstone bases and the vertical proportions of local Inter-war Art Deco apartment buildings.

“The proposal is governed by a holistic design language that reconciles the solid horizontal masonry of the neighbourhood’s podiums with the elegant verticality of its Art Deco heritage,” the architect said.

“The building maintains a consistent rhythmic logic utilising deep recesses and a sophisticated material transition to break down the 10-storey scale into a series of articulated, human-scale volumes.”

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="0147f503-1af1-4d51-97fb-c2f1cba63a9d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20bldg.png?VersionId=GoW7q3NlK67OpnePXhk7zvklrlKb72Qc" />

Large-format sandstone tiles will define the lower levels, establishing a robust base that negotiates the change in elevation from Bellevue Road. Above, red-tinted precast concrete frames, recessed balconies, anodised aluminium screens and expanded metal details will create a more vertically expressed façade. Integrated planter beds will introduce greenery across balcony edges and recessed sections of the building.

The elongated northern façade has been divided into three recessed vertical masses to reduce its perceived length. Triangular window elements and metal privacy screens reference the geometry of nearby Art Deco buildings while controlling overlooking toward surrounding homes. The southern elevation will incorporate further privacy screening, landscaped edges and deep balconies to maintain light and ventilation.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="e8679cf1-18bc-4447-8a0f-0052b94ab83c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da%20rooftop.png?VersionId=5SQqQqRFf76rvE2p1TbxJSweMN70AIbc" />

Private and communal landscaping is distributed throughout the development. A landscaped garden apartment is positioned within the lower portion of the site, while a communal terrace on Level 5 will include a central timber deck, barbecue facilities, resident planting plots and areas for outdoor dining and informal gatherings.

Common Office described the terrace as an elevated sanctuary designed to capture district views and sunlight. Its planting strategy incorporates endemic species associated with the Eastern Suburbs Banksia Scrub, extending the landscape vertically through the building and providing habitat for local flora and fauna.

A second communal outdoor area is proposed at roof level, with built-in seating, paved gathering areas and perimeter planting.

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction. Positive Investment Enterprise is delivering the 16-apartment Kew Palm House on Birriga Road, while Chanine Developments is also under construction at Florian, a 36-apartment project on Banksia Road.

&nbsp;

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction.

First Look: Apartment development pitched for Bellevue Hill, Double Bay fringe

South Brisbane's apartment pipeline continues to build momentum, with <a href="https://www.apartments.com.au/developers/trk-property-group">TRK Property Group</a> lodging plans for a 161-apartment tower on Montague Road as developers accelerate investment across the Kurilpa Sustainable Growth Precinct.

The proposal for 176–186 Montague Road would replace an existing office building with a 20-storey residential tower designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, adding to a growing pipeline of high-density projects reshaping one of Brisbane's fastest-evolving inner-city precincts.

The project has been conceived as a "living building", featuring a flowing tower form, extensive vertical landscaping, and generous communal spaces that respond to the evolving Kurilpa Sustainable Growth Precinct.

TRK Property Group Development Director Matt Kan said the project reflected the confidence developers have in South Brisbane's long-term future.

"South Brisbane is entering an incredibly exciting period, and we see Montague Road sitting right at the heart of that evolution," Kan said.

"With the former Visy site directly opposite us and significant investment planned throughout the broader Kurilpa precinct, there is a real sense of momentum around this part of the city and what it will become over the coming years.

"For TRK, this is an opportunity to be part of that next chapter and deliver a project that responds to where the precinct is heading, while contributing to the continued evolution of Brisbane's river edge."

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="590fe1ad-f892-4446-a679-80e33a16d029" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20tower%20facade.png?VersionId=uOJStrcKpyHFcPE1w6_9SMAFzVMCcZll" />

The scheme includes a mix of one, two, three and four-bedroom apartments, incorporating multi-purpose rooms in selected residences to provide additional flexibility for home offices or expanded living areas. The proposed mix comprises 15 one-bedroom, 13 one-bedroom plus MPR, 73 two-bedroom, 26 two-bedroom plus MPR, 30 three-bedroom, and four four-bedroom apartments.

Rather than adopting a conventional rectilinear tower, COX Architecture has developed a sculpted form inspired by the movement of the Brisbane River.

"The proposal has been designed by COX Architecture as a 'living building' that responds to the site's riverine setting, floodplain history and evolving urban context within the Kurilpa Sustainable Growth Precinct," the planning report states.

"The architectural form draws from the fluid nature of the Brisbane River, with a curved and undulating tower form that creates a varied architectural edge and avoids a conventional rectilinear tower expression."

The podium has also been designed as an architectural feature rather than a conventional parking structure, with cascading planting, screening and natural-toned materials softening its appearance. Resident parking is elevated above ground level to address the site's flood constraints, while habitable apartments sit above flood planning levels. Upper-level communal facilities are designed to accommodate shelter-in-place arrangements during major flood events.

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="01fa15d0-90df-46c7-9555-7941fc45373c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20podium.png?VersionId=mHyua.w1pHGBt9qEdWzrlsv.leztUCwO" />

Communal amenity is a major focus of the proposal. Around 1,815 sqm of shared resident space is proposed across the ground floor, level 19 and the rooftop, including co-working areas, indoor and outdoor recreation spaces, wellness facilities, dining and gathering areas, lawn spaces, a rooftop pool and spa, and extensive landscaping. At street level, a landscaped forecourt and approximately 345 sqm of publicly accessible open space along Montague Road are intended to improve the pedestrian experience while activating the building's frontage.

The development will provide 163 car spaces, including 152 resident bays and 11 visitor spaces, together with 144 bicycle spaces incorporating resident storage, visitor parking, bicycle maintenance facilities and e-mobility charging infrastructure.

The site sits within one of Brisbane's fastest-changing inner-city precincts, less than two kilometres from the CBD and within easy reach of South Bank, West End, the Queensland Cultural Centre and extensive public transport connections. The Kurilpa Sustainable Growth Precinct planning framework is encouraging higher-density residential development to help meet Brisbane's housing supply targets while supporting walkable, transit-oriented neighbourhoods.

TRK Property joins South Brisbane apartment surge with Montague Road tower plans

Article summary

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.

The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.

[smartcode_project:default project_id=90059 project_image_fid=374075]

Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.

The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.

The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.

[smartcode_project:default project_id=90059 project_image_fid=374059]

One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.

Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.

"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.

"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."

[smartcode_project:default project_id=90059 project_image_fid=374060]

Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.

"Materiality tells the story of a place," Williamson said.

"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."

Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.

[smartcode_project_cta:default project_id=90059]

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

The First Home Owners Grant (FHOG) is a government initiative designed to help eligible first-time home buyers by offering financial assistance towards the purchase or construction of a new home.

While the FHOG is a nationwide program, it is administered separately by each state and territory, meaning the eligibility criteria, grant amounts, and property requirements can vary depending on your location. This means that the amount available and the conditions attached to the grant will differ, so it is important to check the specific guidelines for your state or territory.

It’s important to note that the FHOG is just one of several incentives available to first home buyers. In most states and territories, the grant is not linked to stamp duty exemptions or concessions, with the exception of the Australian Capital Territory (ACT). The FHOG is typically a one-off payment, reducing the overall cost of purchasing or building a new home before any stamp duty concessions are applied.

Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.

<h2>New South Wales First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $600,000. For land purchases and owner-builders, the threshold extends to $750,000.

Stamp Duty Benefits: Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.

<h2>Victoria South Wales First Home Owner Grant</h2>

First Home Owner Grant: Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.

Stamp Duty Benefits: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.

<h2>Queensland First Home Owner Grant</h2>

First Home Owner Grant: Offers $30,000 for contracts signed between 20 November 2023 and 30 June 2025. The FHOG applies to new homes valued up to $750,000.

Stamp Duty Concessions: Provides additional concessions for properties valued up to $800,000.

<h2>Western Australia First Home Owner Grant</h2>

&nbsp;

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $750,000 in the southern regions and up to $1 million in the northern regions.

Stamp Duty Concessions: Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.

<h2>Australian Capital Territory First Home Owner Grant</h2>

First Home Owner Grant: Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.

<h2>South Australia First Home Owner Grant</h2>

First Home Owner Grant: Provides up to $15,000 for new homes, including houses, apartments, and townhouses. As of 6 June 2024, there is no property value cap for eligibility.

Stamp Duty Relief: Available for new homes and vacant land purchases.

<h2>Tasmania First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes and off the plan purchases.

Stamp Duty Exemption: Between 18 February 2024 and 30 June 2026, first home buyers of established homes valued up to $750,000 receive a full exemption on property transfer duty.

<h2>Northern Territory First Home Owner Grant</h2>

First Home Owner Grant: The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.

Stamp Duty Exemption: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).

Eligibility criteria and application processes differ across states. Prospective buyers should refer to their respective state revenue offices for full details on grant availability, conditions, and additional concessions.

Every First Home Owner Grant for new property by state

In the ever-evolving landscape of sustainable architecture and environmentally conscious design, systems and ratings in place can help determine the energy efficiency of residential buildings in Australia.

Australia has multiple building rating systems that evaluate energy efficiency and sustainability in existing and new building designs.

Some systems assess individual building components, while others provide an overall rating for the entire structure.

A rating system ensures that homes are comfortable and energy-efficient, whether you are buying, renovating, or building.

NatHERS (Nationwide House Energy Rating Scheme) is a common way for new homes to meet energy efficiency requirements.

As new developments continue to shape the urban environment, understanding NatHERS ratings becomes essential for developers and homeowners. This article delves into the concept of NatHERS ratings, their significance, and how they contribute to creating energy-efficient homes.

<h2>What is NatHERS?</h2>

NatHERS is a national initiative implemented by the Australian government to promote energy efficiency in residential buildings. The scheme aims to provide a standardised method for assessing the thermal performance of homes, considering factors such as insulation, orientation, ventilation, and building materials.&nbsp;

NatHERS ratings are the most common way new homes meet the National Construction Code's (NCC's) minimum energy efficiency requirements.&nbsp;

NatHERS assessments provide thermal and whole-home ratings for new homes, townhouses, and apartments.

The rating helps evaluate the energy performance of buildings, guides homeowners and developers to make informed decisions about the energy efficiency of their properties, and encourages the construction of more sustainable, comfortable, and cost-effective homes.

<h2>How NatHERS Ratings Work</h2>

NatHERS ratings are determined through four accredited software tools (AccuRate, BERS Pro, FirstRate5, HERO) using a calculation engine CSIRO developed to predict building temperature based on various factors.

The tools can model complex effects of building mass, insulation, window size, and other elements.

The outcome is a star rating that reflects the building's overall thermal efficiency, indicating how well it can maintain a comfortable indoor temperature without excessive reliance on heating or cooling systems.

The star rating scale ranges from 0 to 10, with a 6-star rating being the minimum requirement for compliance with the National Construction Code (NCC).&nbsp;

Achieving a higher star rating demonstrates a commitment to energy efficiency and sustainability, as the building is better equipped to minimise its environmental impact and reduce long-term energy costs.

Anyone can use NatHERS tools, but accredited assessors can provide certified ratings and professional advice.

<h2>Benefits of Higher NatHERS Ratings</h2>

Energy Efficiency: Buildings with higher NatHERS ratings are more energy-efficient, requiring less heating and cooling energy. This reduces the structure's carbon footprint and lowers occupants' energy bills.

Cost Savings: Homes with higher NatHERS ratings are generally more energy-efficient, resulting in reduced energy consumption for heating and cooling. This translates to lower energy bills for homeowners, making sustainable living environmentally friendly and economically viable in the long run.

Environmental Impact: Lower energy consumption directly translates to a reduced environmental impact. Buildings with higher NatHERS ratings contribute to the overall goal of mitigating climate change by lowering greenhouse gas emissions associated with heating and cooling systems.

Improved Comfort: Buildings with high NatHERS ratings offer better thermal comfort to occupants. Proper insulation, well-designed ventilation, and optimal orientation maintain a consistent and comfortable indoor temperature, providing occupants with a more enjoyable and healthier space.

Market Value and Desirability: Higher NatHERS ratings can enhance the market value of a property. As energy efficiency becomes a more significant consideration for homebuyers, a well-rated building may attract a premium price and stand out in the real estate market.

Compliance with Building Codes: NatHERS ratings are a vital component of the National Construction Code (NCC), and compliance with these ratings is often a mandatory requirement for new developments. Local councils and planning authorities may set minimum energy efficiency standards that must be met to obtain development approval.

The Nationwide House Energy Rating Scheme (NatHERS) is a crucial initiative shaping the future of energy-efficient, resilient, and cost-effective homes. With its recent upgrades, NatHERS has evolved into a world-leading tool for the building sector, supporting the global commitment to achieving net-zero emissions by 2050.

Staff Writer

What is a NatHERS rating in new off the plan apartment developments?

Mixed-use developments have gained significant popularity across Australia in recent years due to their unique blend of residential, commercial, and recreational spaces.

Unlike traditional single-purpose developments, mixed-use projects offer a harmonious integration of various functions within a single locale.

Residential units seamlessly coexist with commercial establishments, retail outlets, dining venues, entertainment hubs, and recreational facilities, with the combination not only enhances convenience but also fosters a vibrant lifestyle and a sense of community.

<h3>Convenience and accessibility</h3>

Mixed-use developments are designed with convenience in mind. They often integrate residential units with commercial spaces, retail outlets, restaurants, and recreational facilities, creating a self-contained community.

[smartcode_project:default project_id=114215 project_image_fid=204874]

The proximity allows residents to enjoy the convenience of having essential amenities and services within walking distance. Whether it's grabbing a cup of coffee, going grocery shopping, or accessing healthcare services, everything is conveniently located, saving residents time and effort.

<h3>Vibrant lifestyle and community</h3>

One of the major advantages of mixed-use developments is the vibrant lifestyle they offer. With a diverse range of amenities and communal spaces, residents have ample opportunities to interact, socialise, and build a sense of community.

[smartcode_project:default project_id=107714 project_image_fid=214122]

The presence of parks, community centres, and shared spaces fosters a lively atmosphere, encouraging residents to engage in various activities and events. The vibrant lifestyle within these developments creates a unique sense of belonging and camaraderie among the residents.

<h3>Potential for higher rental yields and property value appreciation</h3>

Mixed-use developments tend to attract a broad range of tenants and buyers due to their versatile nature. This high demand can result in higher rental yields for investors and potentially lead to property value appreciation over time.

[smartcode_project:default project_id=139989 project_image_fid=212887]

The integration of commercial and retail spaces attracts businesses, which can provide a stable rental income stream. Additionally, the popularity of mixed-use developments often drives up property values, making them a potentially lucrative investment in the long term.

<h3>Enhanced security and maintenance</h3>

Mixed-use developments typically have comprehensive security measures in place. With controlled access points, CCTV surveillance, and professional security staff, residents can enjoy enhanced safety and peace of mind.

[smartcode_project:default project_id=108019 project_image_fid=212658]

Additionally, these developments often have dedicated maintenance teams responsible for the upkeep of common areas, landscaping, and infrastructure. This ensures that the overall appearance and functionality of the development are well-maintained, creating a pleasant living environment for residents.

<h3>Live-work-play balance</h3>

One of the key attractions of mixed-use developments is the ability to achieve a desirable live-work-play balance. The integration of residential and commercial spaces allows residents to live closer to their workplaces, reducing commuting time and improving work-life balance.

The proximity to various amenities and recreational facilities encourages an active and healthy lifestyle. Residents can easily access fitness centres, parks, restaurants, and entertainment options, all within the same development, leading to a more fulfilling and convenient way of life.

alisonwarters@gmail.com

The top five reasons to buy in a mixed-use development

When buying a property, everyone needs to be aware of the additional costs that come as part of the buying process.

Often the largest outlay, after the deposit which goes to the bank, is stamp duty.

<h2 style="line-height: 1.38;">What is Stamp Duty?</h2>

Stamp duty is an extra tax to pay the government when you buy land, a property, and other certain assets.

It happens when the legal ownership is transferred. It can also be known as property transfer duty or transfer duty.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="415" src="https://www.youtube.com/embed/C32BWkB5--c" title="YouTube video player" width="660"></iframe>

<h2>Who pays Stamp Duty?</h2>

In some circumstances, you may get an exemption. For some states, you won’t have to pay for stamp duty if you are a first home buyer or a pensioner for houses under a particular price. There are also stamp duty concessions, where you may be entitled to a discount.

<h2>How much does Stamp Duty cost?</h2>

Each state has different rules which affect how much you need to pay. These rules can affect the rate you pay, and the timeframe you will need to pay in. Before you buy land or a property, make sure you check the up-to-date information for your state’s stamp duty.

You can use a free stamp duty calculator online to see approximately how much you’ll need to pay. Find out if you’re eligible for an exemption by enquiring on a project via Urban!

Overall, the stamp duty you need to pay will depend on:

<ul>
	<li aria-level="1">How much your land/property is worth</li>
	<li aria-level="1">Where your land/property is located</li>
	<li aria-level="1">What type of land/property it is</li>
</ul>

Want to find out more? <a href="https://www.youtube.com/@UrbanAustralia?utm_source=YouTube&amp;utm_medium=Video&amp;utm_campaign=Subscribe&amp;utm_id=Subscribe">Subscribe to our YouTube channel</a> for more property videos.

Ellen Walker

Off-the-plan property explained: What is stamp duty?

When buying an apartment, most people compare the big-ticket items first. Floorplans. Kitchens. Balcony size. Natural light. The view.

But there's one everyday consideration that often doesn't come up until after moving in: how parcels are delivered.

As online shopping has become part of everyday life, parcel deliveries have shifted from an occasional event to a regular occurrence. Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally.

For apartment residents, that can present a challenge.

If nobody is home to accept a delivery, parcels may be redirected to a nearby Post Office, left in a building lobby or common area, or require building management to step in. In higher-density buildings, where dozens or even hundreds of residents may receive deliveries each day, parcel management has become an increasingly important part of everyday living.

That can create a range of frustrations. A missed delivery often means making time to collect a parcel elsewhere, while packages left unattended in foyers or mail areas can create clutter and increase the risk of theft. What seems like a minor inconvenience can quickly become a recurring issue for residents who shop online regularly.

It's one of those details that rarely features in a display suite but can have a noticeable impact once residents move in.

As a result, buyers are beginning to look beyond traditional apartment features and consider how a building supports day-to-day convenience, including whether there are secure options for receiving deliveries.

Australia Post's Parcel Lockers provide one solution.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/CkF2oKmlACg?si=C50sDaoUUn2nuLmq" title="YouTube video player" width="560"></iframe>

Rather than having a parcel delivered directly to an apartment, eligible deliveries can be sent to a nominated Parcel Locker. Once the parcel arrives, residents receive a notification through the AusPost app or SMS and can collect it using a QR code or one-time PIN at a time that suits them.

The Parcel Locker network now includes more than 1,500 locations nationwide, with installations at Post Offices, shopping centres, transport hubs and an increasing number of residential developments. By providing a secure collection point, Parcel Lockers help reduce missed deliveries and avoid parcels being left unattended in common areas.

For developers, parcel infrastructure is becoming another way to improve the resident experience. Rather than relying on concierge staff or leaving parcels in communal spaces, secure collection points help streamline deliveries while preserving the presentation and functionality of shared areas.

For buyers, it's a reminder that the best apartment features aren't always the most obvious.

A generous floorplan or quality finishes might help narrow the shortlist, but the conveniences that simplify everyday life, whether that's EV charging, secure bike storage or reliable parcel delivery, often become the features residents appreciate most once they're living there.

The apartment feature many buyers don't think about, until their first missed delivery

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An investigation by consumer group Choice has found that banks are neglecting their duties to give out key loan fact sheets.
Only one out of 18 Sydney bank branches visited by Choice spokesman Matt Levey provided a copy of the fact sheet when he requested information about comparable fees and interest rates.
A key fact sheet helps borrowers compare the home loan they are being offered with other similar loans to help them make an informed decision.
Since January 2012 mortgage providers must give customers a key facts sheet on request.
"We ended up with a lot of paraphernalia ... a lot of handwritten notes, a lot of glossy brochures with photos of bank CEOs," Levey told the ABC.
"We got one home loan fact sheet. We say that's not good enough.
"If the banks were serious about standing behind their products and serious about competing, then they'd be providing Australian consumers with the information they needed to shop around."
Levey says he did not ask for the fact sheet by name, but says Choice does not believe it is realistic to expect customers to ask for the fact sheet by its official name: the federal government's key home loan fact sheet.
“We think it's enough to go in and say, ‘Can we have some information to go away and compare loans?'
"If that doesn't work, then we think the requirement needs to change."
To learn more about refinancing, sign up for the free Property Observer refinancing webinar on Wednesday at 12.30.
{module What do you intend to do given the current interest rate fluctuations?}
 
{module Have you changed lenders in the last six years?}
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Banks not giving out key home loan fact sheets: Choice

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The Charter Hall Retail Trust has reported a 5.6% drop in interim statutory profits to $41.7 million despite “resilient” non-discretionary sales growth from its anchor tenants Coles and Woolworths.
The two supermarket groups recorded sales growth of 4.6% for the six month reporting period to December 31, 2011, compared with the REIT’s specialty tenants, which managed sales growth of just 1.7%.
Acting CEO Scott Dundas says the resilience of non-discretionary retail spending “continues to positively reinforce the REIT’s underlying strategy of being a specialist owner of supermarket anchored neighbourhood and sub-regional shopping centres in Australia.
“We believe the continued sales growth of this sector, as highlighted by recent Australian Bureau of Statistics retail data which reported annual food-based turnover of 4.2%, coupled with 8.2% specialty occupancy costs of the REIT’s portfolio provides a positive opportunity for further income and capital growth for unitholders,” Dundas says.
Over the six-month period Charter Hall Retail disposed of four US retail assets as it refocused on strengthening its Australian portfolio with the acquisition of three former Centro-managed malls, all of which are anchored by either a “dominant” Coles or Woolworth’s supermarket.
The trust intends to sell a further three wholly owned assets in the US by June 2012.
In December the trust acquired the Lansell Plaza in Bendigo for $32 million from the Centro Group and the <a href="https://www.propertyobserver.com.au/retail/centro-sells-adelaide-shopping-centre-following-brisbane-settlement/2011092051630" target="_blank">Gladstone Shopping Centre</a> in Queensland from a syndicate managed by the Centro Group for $17 million.
In August it acquired the Albany Creek Shopping Centre in Brisbane for $40.1 million from a Centro/MCS-managed syndicate.
In its annual results, Charter Hall Retail REIT said its Australian portfolio continued to perform well during the year, “highlighting the resilience of the non-discretionary retail sector”.
Occupancy across its Australian portfolio stands at 98.7% with same property net operating income growth of 3.5%
The $946 million portfolio achieved specialty rental rate growth of 4.1% and signed 82 new lease and 77 renewal transactions in the half year.
 
 
 
 
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Strong Coles and Woolies sales help prop up Charter Hall Retail REIT as profits fall

<html><body>Australian Property Monitors (APM) has released a list of results from 244 auctions in Sydney for the weekend of February 18. The clearance rate was 54%. <a href="https://www.homepriceguide.com.au/saturday_auction_results/Sydney.pdf" target="_blank"> Click here</a> for the auction results, and click on each street address to see the property's marketing.</body></html>

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APM's 244 Sydney auction results showing a 54% success rate

<html><body>Australian Property Monitors (APM) has released a list of results from 118 auctions in Melbourne for the weekend of February 18. <a target="_blank" href="https://www.homepriceguide.com.au/saturday_auction_results/Melbourne.pdf">Click here</a> for the auction results, and click on each street address to see the property's marketing.</body></html>

APM's 118 Melbourne auction results 

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Under the common law principle of caveat emptor, or “buyer beware” there is a recognised duty upon a buyer of a property to be satisfied about what he or she is going to purchase. The doctrine assumes that the purchaser has acquired the property together with all defects either as to title or quality. 
Over the years most Australian states have introduced statutory regimes for seller disclosure in residential property transactions. In New South Wales Section 52A of the Conveyancing Act 1919 requires a seller of residential property to disclose a range of matters covering defects in title and defects in quality of title through a combination of documents and certificates attached to the proposed contract of sale, and these are generally related to easements and that the property is sold free of encumbrances, etc. There is no requirement to disclose other defects (such as structural ones) irrespective of their impact on the value or use and enjoyment of the property. 
So where do”‘stigmatised” properties come in to all of this? These are properties where a murder, suicide, violent crime or other horrific event has occurred on the property at some stage. The term can also include properties that are haunted or even have a resident poltergeist – and the stigmatisation effect can last for decades or even centuries. 
Let’s face it. Nobody wants to live in a home where something awful has happened. But how do we know if a property has this type of history? The seller is clearly not going to explain the gory details to anyone, and in some cases not even to the selling agent. And agents and sellers cannot be held liable for not disclosing nonmaterial, or nonphysical, defects about a house, and they don’t have any obligation to disclose “latent defects” to the buyer even if they materially affect the physical health or safety of individuals on the premises. 
But in reality the fact is that in these cases the onus of responsibility may come down to the selling agent. The reason for this is that he or she has a moral (if not legal) obligation and a duty of disclosure to inform prospective buyers that the events that occurred in the property may affect its value. It comes down to what did you do or say, or not do or say, that affected a decision to buy? 
Real estate agents need to keep in mind that anything that could affect a purchaser’s decision to buy must be disclosed under the Material Fact section of current legislation. A Material Fact can be defined as “A fact that would be important to a reasonable person in deciding whether or not to proceed with a particular transaction”. 
Schedule 1 (3) of the Property, Stock and Business Agents Regulation 2003 also states that: “You must be fair and reasonable to all parties, and must not mislead or deceive any parties in negotiations or a transaction.” 
In other words, caveat actor, or “agent beware”. If you don’t disclose events that happened in a property you are selling that may affect its value you are open to be blamed and possibly taken to court. 
Below are a few tips if you decide to list a stigmatised property: 
<ul>
<li>Separate fact from fiction, and determine the impact disclosure will have on you as the selling agent, the seller, the buyer, and price of the property. </li>
</ul>
<ul>
<li>Don’t take the listing (or keep it) if the seller refuses to disclose stigmatised information or prevents you from discussing it. </li>
</ul>
<ul>
<li>Maintain trust with your buyers by disclosing the facts as you know them. </li>
</ul>
<ul>
<li>Don’t be silent, and don’t misrepresent. It's not just a matter of what you say. It can end up being about what you didn’t say.</li>
</ul>
 Tim Mansfield is founder and principal of Sydney-based buyers' agency <a href="https://www.primepropertybuyer.com/" target="_blank">Prime Property Buyer</a>.
 
 
 
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Murder and mayhem: What an agent should disclose if a property has an unsavoury past

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Strong rises in values of coastal Perth suburbs have led a resurgent WA housing market, according to the Real Estate Institute of Western Australia.
REIWA president David Airey says the WA market is showing the first real indications of a recovery in 18 months.
According to REIWA data, the strongest-performing suburb over the December quarter was North Beach, 16 kilometres north of the Perth CBD, where house prices are up 15.3% for the quarter to a median of $980,000. North Beach turned around a 5.8% annual decline recorded over the September quarter 2011 to end the year with median house prices up 10.1%.
The rise in the North Beach median price was more than double that of the 7.3% increase in Rossmoyne on the Canning River to the south of the CBD, where the median house price has risen to $915,000. Rossmoyne prices were down 11.5% for the year to the September 2011 quarter.
Third on the list was Ocean Reef in the outer-northern suburbs, where prices increased by 4.5% to a median of $700,000 after registering a 6.2% annual decline over the September quarter.
Other coastal and riverside suburbs on the list of the top 10 suburbs for the December quarter were Salter Point, Jindalee and Bateman.
The best-performing suburb for the year was Marmion, close to North Beach, where prices rose 10.5% for the year to a median of $950,000.
Airey says suburbs like Marmion and North Beach have performed well because they are small, niche suburbs with limited properties for sale.
According to Airey, signs of a turnaround in the WA market include the increases in Perth house and unit prices over the December quarter (up 0.5% and 1% respectively); a 12% decline in the number of properties on the market; a 4% increase in residential property sales to 9,600; a decline in the number of selling days from 81 to 77 to 77and a decrease in the number of vendors discounting their properties to achieve a sale.
Despite the increase in sales over the quarter, annual dwelling sales for 2011 were the lowest in 20 years.
“The modest increase in Perth’s median house price is due to the growing numbers of up-grade buyers who entered the market, particularly in the $500,000 to $700,000 price range,” says Airey. 
“This has countered the large sales volumes of first-home buyers purchasing the more affordable homes and skewing the median downwards in recent times. 
“When you look at all the market indicators together to get a wider picture you can see that buyers and sellers are becoming more confident, and things really do look like they’re settling down into a more normal pattern,” he says. 
According to the most recent RP Data-Rismark house price index, Perth was the worst-performing capital city property market, with home prices down 1.6% in December and 4.3% for the year.
Rismark managing director Ben Skilbeck says Perth was one of the more volatile housing markets in December.
 
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WA housing market recovering, led by coastal suburbs: REIWA

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Property valuations (and valuations of equipment and other assets for that matter) are relevant in many tax contexts, including capital gains tax (CGT) and GST. Getting a valuation wrong can mean more tax to pay.
A disagreement with the Tax Office on a valuation can materially alter the tax consequences of a transaction. Indeed, a recent decision by the Administrative Appeals Tribunal saw a taxpayer fail the CGT maximum net asset value test (so the CGT small business concessions could not be accessed) because of a valuation issue. My recent article <a href="https://www.smartcompany.com.au/tax/20111215-another-year-and-capital-gains-still-causes-problems?utm_source=SmartCompany&amp;utm_campaign=b8d9118ba4-Monday_12_December_201112_12_2011&amp;utm_medium=email">Another year and capital gains still cause problems</a> discussed this case further.
Hand in hand with the need for valuations is the corresponding need to keep good records. In the CGT context for example, an asset that may be subject to CGT when it is later sold, needs to have records kept about its purchase price, any improvements to the asset, etc. If an asset is inherited, it is highly prudent to obtain a valuation of it, in case tax consequences later arise.
The Tax Office has released a paper highlighting what it says are recurring issues it has found concerning valuations of property in relation to the application of the GST margin scheme provisions. The margin scheme essentially allows less GST to be paid where sales of land or strata units are involved, provided certain conditions are met.
The Tax Office does not automatically accept every valuation submitted to it. Many valuations it receives are referred to the Australian Valuation Office (AVO) for evaluation, particularly as to whether or not the valuation specifies a value that is within a range that is reasonable.
Often, when certain elements of a valuation are outside an acceptable range, the Tax Office says the ultimate valuation is higher than it should be resulting in a lower margin and less GST payable.
The paper sets outs the main issues regarding what the ATO considers are non-complying valuations it has identified and its position when those issues occur. Some issues include the following.
<table style="width: 470px;" border="1" cellpadding="0">
<thead><tr>
<td valign="top">
Issue
</td>
<td valign="top">
ATO position
</td>
</tr></thead>
<tbody>
<tr>
<td valign="top">
Profit and risk ratios: When valuing a property on the basis of a hypothetical development approach, the anticipated profit and risk margins are determined after consideration of the level of risk associated with a project as at the date of valuation. In many cases, the ATO says profit and risk ratios are not supported in the valuation report and appear to be well below what could reasonably be expected.
</td>
<td valign="top">
Valuers need to determine profit and risk ratios that are reflective of the characteristics and condition of the subject property at the valuation date. The ATO says these ratios need to reflect realistic profit expectations with appropriate and reasonable weightings for risks apparent at the date the property is required to be valued.
</td>
</tr>
<tr>
<td valign="top">
Market interest rates: Valuations need to reflect an open market interest rate. The ATO considers the use of negotiated commercial rates, "in-house" finance rates or special discounted rates may not be appropriate as these rates are not reflective of open market rates but, rather, are specific to a particular entity or a set of circumstances.
</td>
<td valign="top">
Valuers need to apply appropriate interest rates at the date the property is to be valued. The ATO says these rates should reflect commercially available rates supported by evidence from within the industry at that point in time or alternatively based on the rates published by the Reserve Bank of Australia.
</td>
</tr>
<tr>
<td valign="top">
Comparable sales: These are often unavailable at valuation date and pre and post valuation date sales are used as a reference point for a valuation. Also, there are instances where purported comparable sales from a geographically different area or different market segment to that of the subject property are referenced in a valuation. Often, supporting sales data in property valuations is provided to the ATO without any explanation as to why the data is comparable.
</td>
<td valign="top">
Comparable sales must withstand objective scrutiny of their comparability. If post valuation date sales or remote area sales are to be used, the ATO says these must have commentary as to why the valuer considers it reasonable to use these sales to establish the subject property value.
</td>
</tr>
<tr>
<td valign="top">
Development costs: Many valuers undertaking hypothetical development valuations have completed these valuations with the exclusion of important development costs such as acquisition costs, legal costs and holding costs.
</td>
<td valign="top">
The ATO says all relevant costs with appropriate weighting should be included in a hypothetical development valuation.
</td>
</tr>
</tbody>
</table>
The Tax Office says that valuations also need to reflect reasonable allowances for commencement and completion dates as well as selling timeframes, etc as these factors will affect holding costs, financing costs and overall project risk. In examining valuations, the AVO found that in a number of cases, lead times for example were unrealistic given the size and the peculiar characteristics of the property development. The ATO view is that project lead times, selling timeframes and completion timeframes must reflect the commercial, market and planning reality of a project.
Many valuations reflect a value of the real property interest that is being sold rather than the interest that existed at the valuation date. In these situations, the ATO considers that if the valuer is asked to value a real property interest that did not exist at the valuation date but was derived from another interest that existed at that date, the valuation must be made as follows:
<ul style="list-style-type: none;">
<li>
a valuation of the interest in existence at the valuation date must be made;
</li>
<li>
the valuation of that interest must be apportioned on a fair and reasonable basis, to ascertain the part of the valuation that relates to the interest that is being sold. The ATO requires all factors taken into account in the apportionment to be explained to show why the apportionment is fair and reasonable.
</li>
</ul>
The ATO said it accepts that valuations can, by their very nature, be a subjective assessment of a property's value and in many cases there are interpretive assessments of impacts on the property value. However, it said that regardless of this subjectivity, it still has an expectation that values will fall within a "reasonable range".
Where the AVO opinions are supported by evidence, and also align with the ATO's perception of reasonableness, the ATO said these will be referred to the relevant valuer to enable those noted elements of the valuation to be reviewed. If there is sufficient merit in the valuer's adopted assumptions and conclusions, such that these can be considered reasonable, the ATO said the valuation can be accepted as a complying valuation.
Where the valuer's assumptions and conclusions are not sustainable based on evidence, or are not reasonable, the ATO said the valuation cannot be considered a complying professional valuation. This, in turn, can have tax flow-on implications.
Getting valuations is important in a tax context. But not every valuation will necessarily be acceptable to the Tax Office.
Terry Hayes is the senior tax writer at <a href="https://www.thomsonreuters.com.au/">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/">SmartCompany.</a>
 
 
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How to get property valuations right: Terry Hayes

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The RBA’s decision to not reduce rates this month caught most pundits by surprise, including me. Given the international and local data, I thought the board would err on the side of caution and cut rates.
As I always note when asked to call what the RBA will do next, this is a call on how another body will respond to what it perceives as the economic data and the direction its model of the economy predicts the actual economy will move in. That’s closer to picking which cockroach is going to walk out of a circle first in a Changi prison gambling den than it is to economic forecasting per se (which is dubious enough activity in itself). So making a wrong guess about what the RBA will do is not the same as making a wrong economic forecast; you’re just making a different forecast of the future than is the RBA.
The RBA’s <a href="https://www.rba.gov.au/media-releases/2012/mr-12-02" target="_blank">explanation </a>for its decision shows that it is making a rosy call of both the current data and the direction in which the Australian economy is headed:
"Information on the Australian economy continues to suggest growth close to trend… the unemployment rate increased slightly in mid year, though it has been steady over recent months… In underlying terms, inflation is around 2.5%… the Bank expects inflation to be in the 2-3% range.
"Credit growth remains modest, though there has been a slight increase in demand for credit by businesses. Housing prices showed some sign of stabilising at the end of 2011, after having declined for most of the year. The exchange rate has risen further, even though the terms of trade have started to decline… With growth expected to be close to trend and inflation close to target, the Board judged that the setting of monetary policy was appropriate for the moment."
As <a href="https://www.smh.com.au/opinion/editorial/sky-probably-not-falling-in-rba-20120208-1rewj" target="_blank">The Sydney Morning Herald</a> editorialised, the RBA message was that the future looks good:
"Move right along folks. Nothing to see here. By keeping interest rates on hold this week, the Reserve Bank is sending a subconscious message to borrowers: the economy is doing reasonably well. There is no need to panic…
"Although we in NSW seem bogged Eeyore-like in our sad and dank little corner of the forest, glumly chewing our thistles day after day, perhaps we really ought to cheer up. Gloom is not just miserable in itself. When it comes to the economy, it’s dangerous."
This is not the take that the majority of economic pundits have on the data – and for once, I’m with the majority. Normally the majority is bullish (because they have a neoclassical perspective on the economy that largely ignores credit, and thinks the economy always returns to equilibrium) and I’m bearish (because I have a “post Keynesian” perspective that sees credit as the key motive economic force, and believes the economy is always in disequilibrium).
The majority of economic pundits lined up with me for a change because there was a range of data that implied the economy was stalling. Firstly, unemployment has been trending up, and the “steady over recent months” phenomenon that the RBA referred to above was entirely due to a fall in the participation rate. Had this remained at the November level, the ABS unemployment rate would have jumped to 5.6% last month.
<img src="/images/stories/keenfeb171.gif">
And that’s the good news: as was widely reported, employment fell by almost 30,000 last month, so that net job growth in 2011 was zero – the <a target="_blank" href="https://www.theaustralian.com.au/business/economics/zero-jobs-growth-worst-in-20-years/story-e6frg926-1226248875725">worst</a> outcome in 20 years.
Secondly, a broader measure of unemployment maintained by Roy Morgan Research hit 10.3% – 5% above the ABS figure. The ABS treats someone who has worked for one hour in the previous two weeks as employed, a definition that Roy Morgan rightly <a target="_blank" href="https://www.roymorgan.com/news/polls/2002/3490/">rejects</a>:
“Surely if someone is not working, is looking for work and considers themselves to be unemployed, then they should be considered unemployed regardless of whether they happen to have done a couple of hours work here and there during the month?”
The ludicrous official definition of unemployment is a classic case of bureaucracies (including the <a target="_blank" href="https://www.ilo.org/global/lang--en/index.htm">United Nations International Labor Organization</a> in this case) eliminating a problem by redefining it rather than solving it. Many people have criticised this definition (including <a target="_blank" href="https://www.henrythornton.com/article.asp?article_id=4182">Peter Brain</a> from the<a target="_blank" href="https://www.nieir.com.au/">National Institute for Economic and Industry Research</a>, who found that over a dozen official redefinitions of unemployment had all reduced the recorded level); since the <a target="_blank" href="https://www.roymorgan.com/resources/pdf/papers/20030801/AGE%20-%20Is%20unemployment%20at%2010%20per%20cent.pdf">late 1990s</a>, Roy Morgan has gone one better and conducted a monthly <a target="_blank" href="https://www.roymorgan.com/news/polls/2001/3452/">survey</a> using a definition of unemployment that actually makes sense:
”According to the ABS definition, a person who has worked for one hour or more for payment or someone who has worked without pay in a family business, is considered employed regardless of whether they consider themselves employed or not.
"The ABS definition also details that if a respondent is not actively looking for work (ie: applying for work, answering job advertisements, being registered with Centrelink or tendering for work), they are not considered to be unemployed.
"The Roy Morgan survey, in contrast, defines any respondent who is not employed full or part-time and who is looking for paid employment as being unemployed.”
Roy Morgan’s definition therefore necessarily records a higher level of unemployment than the ABS – and they are also a more legitimate measure of real unemployment. However their results are also more volatile, since their sample is smaller than the ABS’s, and the results are not seasonally adjusted.
<img src="/images/stories/keenfeb172.gif">
Overall however, Roy Morgan’s figures are a more accurate indicator of the level of unemployment than the ABS’s, and also as a harbinger of where the ABS data may move in the future. The current gap between the two measures is the highest it has ever been – over 5 per cent, when the average gap has been about 2.5 per cent – and this implies that the next move in the ABS figures could be substantially upwards. Gary Morgan <a href="https://www.roymorgan.com/news/polls/2012/4742/" target="_blank">warned</a> prior to the RBA's meeting that the economy is a lot weaker than the central bank seems to think:
“Today’s Roy Morgan unemployment estimates strongly support anecdotal evidence of continuing job losses throughout Australia. Just in the past week we have been told that Westpac has announced 550 jobs to go; ANZ is axing 130 jobs; Holden will cut 200 jobs at its Adelaide plant; Toyota will cut 350 jobs in Melbourne; Reckitt Benckiser (maker of Mortein &amp; Dettol) is to retrench 200 jobs at its Sydney operations; defence firm Thales shedding 50 jobs in Bendigo – these are just the most prominent examples of job losses occurring in the Australian economy!
“Economists and politicians are wrong to talk about a ‘tight’ labour market in Australia driving wage pressures. Wage demands (inflation) at the moment are being driven by unions – a small minority of the Australian workforce – not by a tight labour market with workers changing jobs to secure better wages and conditions. Today’s Roy Morgan employment estimates show why inflation in Australia is contained, and will remain contained – at its meeting next Tuesday the RBA must drop interest rates by at least 0.5% and probably more.”
<img src="/images/stories/keenfeb173.gif">
If Gary Morgan is right, the RBA’s rosy forecast for the future will be shown to be in error. The primary source of that error will be not merely misplaced optimism, but reliance upon neoclassical economic models about the economy that ignore the role of credit just at the moment that decelerating credit is finally setting in in earnest in Australia, after being delayed by the first-home vendor’s boost.
<img src="/images/stories/keenfeb174.gif">
The first-home vendor’s boost was the sole cause of the reversal of deleveraging in Australia after the crisis began, with the growth in mortgages more than offsetting the reduction in debt by the business sector.
<img src="/images/stories/keenfeb175.gif">
With that artificial stimulus to credit growth over, credit growth is now decelerating in Australia, and causing unemployment to rise despite the offsetting impact of the resources boom.
<img src="/images/stories/keenfeb176.gif">
 
Mortgage debt is now decelerating strongly, and taking house prices down with it.
<img src="/images/stories/keenfeb177.gif">
From its comment that “Housing prices showed some sign of stabilising at the end of 2011?, the RBA appears to be buying the RPData spin that a one month upwards blip in their data series after 11 months of decline signals a bottom to the housing market. However a simple comparison of house prices here to those in Japan and the US after their bubble economies burst makes it hard to argue that “Australia is different”.
<img src="/images/stories/keenfeb178.gif">
Of course, at this stage it is too early to tell whether we’ll follow the long slow decline of Japanese prices, or the sudden fall that marked the US. But by the end of 2012, Australia’s house price decline profile should be apparent.
<img src="/images/stories/keenfeb179.gif">
Steve Keen is Associate Professor of Economics and Finance at the University of Western Sydney and author of <a target="_blank" href="https://debunkingeconomics.com/">Debunking Economics</a> and the blog <a style="text-decoration: none; color: #287bce; background-color: transparent; margin-top: 3px; margin-right: 0px; margin-bottom: 3px; margin-left: 0px; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; line-height: 14px; padding: 0px;" target="_blank" class="=article" href="https://www.debtdeflation.com/blogs/">Debtwatch</a>.
This article originally appeared on <a href="https://www.businessspectator.com.au/" target="_blank">Business Spectator.</a>
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stevekeen-hGRrVP8sYD

The RBA is overly optimistic: Steve Keen

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Low-risk, income-generating Australian real estate will continue to appeal to global investors in 2012, according to investment bank UBS. 
UBS global property real estate strategist Elisabeth Troni  says real estate yields in Australia, Japan, the core eurozone, the UK and the US are trading between a premium of 2% and 4% over 10-year bonds and above historic averages, suggesting pricing remains attractive.
<img src="/images/stories/bondratescharty.gif">
 
“Yield spreads are well above average in Core Europe, the UK, the US and Australia,” Troni says as part the bank’s Investing in 2012 report. 
According to Troni, global investors are expected to continue to show an appetite for low-risk “core” property assets and avoid more risker, higher-return offerings. 
In a low-interest-rate environment, she says, “most investors remain focused on stable, income-producing investments”. 
“Unlike the recent past, we do not expect a significant shift of fund flows from core into riskier strategies, despite the wide spreads available.” 
Troni says that in the wake of the financial crisis, investors in property have been faced with the problem of generating income in an environment of slower growth and lower interest rates. 
“This search for income is putting into sharp focus the relative pricing of risk across many types of real estate. 
“Real estate is a hybrid of bond-like cashflows from rental income and equity-like gains from capital appreciation. 
“Core real estate, by definition, involves low leverage and stable tenants, which reduces risk and produces distributable income. Core real estate strategies focus on the income return, while opportunistic strategies focus on capital growth and value-add strategies balance the two. 
“Assessing the outlook for global real estate depends to a large extent on the path investors take as they ‘reach for yield’. On an absolute basis, yields on core assets with long-dated income are below long-term averages, making this segment look less attractive (i.e., more expensive). 
“However, this should be expected during a time of heightened global economic uncertainty. The available yield spread between core and value-add investments is wide, suggesting that investors are once again being rewarded for increasing their exposure to non-prime/secondary assets.” 
Troni say while value-add strategies have lagged as investors remain cautious against the backdrop of stagnating economic growth, opportunistic strategies have received reasonable interest from investors. 
“These strategies have largely appealed to investors with the high-risk appetite required to invest in distressed pools of assets or emerging-market growth strategies.”
The full report can be downloaded here.
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Low-risk Australian property better than government bonds: UBS 

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<img src="/images/stories/nabquote.gif">
A rather ironic Terry Ryder from <a href="https://www.facebook.com/hotspotting">Hotspotting.com.au</a> reflecting on the NAB keeping its promise to keep its standard variable rate lower than the other big banks.
It has technically kept its promise while lifting its rates 0.09% so that NAB's rate is now 7.31% but closer to its three other big bank competitors.
 
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