Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

Capital Gains Tax

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GUEST OBSERVER
The issue of negative gearing has roared to the centre of our national political debate.
Last weekend Labor leader Bill Shorten announced major changes to negative gearing and to capital gains tax. The Parliamentary Budget Office estimates that Labor’s policy could raise $32 billion over 10 years.
These are risky changes for our industry and for the economy given they come at a time when growth is so delicately poised.
Major changes to negative gearing and capital gains tax would have far-reaching effects throughout the economy. If enacted, Labor’s policy will distort the market, hit rents, hurt jobs and make it so much harder for families to plan their economic futures – all this without any modelling of its impact on rents, construction levels, jobs or state budgets.
However, it is not only the Opposition that is being tempted by the possibility of big new tax licks.
As yet, we do not have clarity over the Turnbull Government’s position on property taxes. While some frontbenchers and backbenchers have expressed support for the existing system of negative gearing, the Government’s position appears to be fluid.
That’s why the Property Council is putting the case to politicians of all political backgrounds not to damage an industry that supports 1.1 million jobs throughout the economy and generates one ninth of our national income.
Two million Australians own an investment property. Property has always been part of the ‘Australian dream’ and it has been a proven means for Australians on middle incomes to build their wealth.
Playing around with negative gearing policy doesn’t make sense and it’s sure not worth the economic risk.
 
Ken Morrison is the Chief Executive of the Property Council of Australia and can be contacted <a href="https://www.propertycouncil.com.au" target="_blank">here.</a>
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jchancellor-FAypfDUnLy

Negative gearing changes not worth the risk: PCA's Ken Morrison

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In their submission to the House of Representatives Standing Committee on Economics, the Australia Institute state not only is current tax treatment putting upward pressure on house prices but are also encouraging speculative behaviour and increasing the chances of property bubbles and financial instability. 
"Negative gearing has been a part of the Australian tax system from early last century. In the context of residential housing investment it allows property investors to write off any losses against their taxable income from other sources. This effectively means that the tax payer is paying for some of the loss. 
"The CGT discount was introduced in 1999 and means that for assets held for more than a year only 50% of the capital gain is taxed. This decreased the amount of CGT paid, and means capital gains become increasingly important to property investment."
The effect of the GCT discount can be seen in the Net rental income table 1995-2013.
<a href="/images/2015/08/26/Screen%20Shot%202015-08-26%20at%202.26.13%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/08/26/Screen%20Shot%202015-08-26%20at%202.26.13%20PM.png" alt="">
"After the introduction of the CGT discount net rental income collapsed. Investors were willing to take on significantly larger losses at a time when they could keep a larger slice of the capital gain. 
"In a normal investment market if the return on the asset was going down because the price of the asset was rising then this would be a signal to investors that it could be overvalued and would decrease the interest in investing. 
"But an interest in capital gain means that a rising price is a signal to enter the market because future capital gain is likely. Such a situation makes speculative bubbles more likely. 
"While middle and lower income households are being increasingly shut out of home ownership, most of the benefits of negative gearing and the CGT discount flow to high income households. 
"Modelling done by NATSEM for the Australia Institute shows that 55 per cent of the benefits of negative gearing and the CGT discount flow to high income households, while 50% of families only get 13% of the benefit. Figure 3 shows the income distribution of the negative gearing and CGT discount benefits. 
<a href="/images/2015/08/26/Screen%20Shot%202015-08-26%20at%202.28.03%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/08/26/Screen%20Shot%202015-08-26%20at%202.28.03%20PM.png" alt="">
The Australia Institute does not believe that changes made to negative gearing would decrease investment and increase house prices. AI claims that there is already little investment into property with just six per cent of investment finance going to new housing.
"The other 94% is spent on existing stock. If the objective of negative gearing is to encourage new housing then this could be achieved by restricting negative gearing to apply only to new housing. 
"The Australia Institute proposes that negative gearing is restricted to new housing stock and only for a period of 10 years.
"The CGT discount replaced a system where capital gains were discounted by the inflation rate. The argument for the CGT discount is that it is a simpler method for calculating and taxing the real capital gain. 
"The broader question that should be considered is why we tax real capital gains but level all other taxes on the nominal gain. For example, interest earned on money is taxed at the nominal interest rate rather than the real interest rate. 
"Given that all other taxes are levelled on the nominal gain and not the real gain there is little justification that capital gains should be taxed differently. The Australia Institute proposes that the CGT discount should be abolished. 
"These changes will have a number of effects. It will decrease demand for housing and hence put downward pressure on house prices as potential investors pick other investment opportunities. 
"It creates a bigger incentive for new housing. It reduces the speculation in the residential housing market, making property bubbles and financial instability less likely. Finally it will raise $7.4 billion a year in revenue at a time when the government is trying to decrease the budget deficit."
 
The Australia Institute report outlined the case for abolishing the capital gains tax discount – not capital gains tax as previously headlined.
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Abolish capital gains tax discount: Australia Institute

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Hi Margaret,
I have had an investment property for the past seven years that is negatively geared in the inner Melbourne Inner East. 
The house is very old and has had numerous problems due to its age. We are looking at demolishing this house and rebuilding a new home.
 On completion of construction, our intent is to either rent it out or making this our principle place of residence (PPOR) if we can't rent it out. 
Could you please advise, if we decide to sell it in a few years' time (after we have used it as a PPOR), would we be liable for capital gains tax (CGT) or is there a sunset clause after which CGT does not apply? 
Regards,
David
Hi David
It would seem that CGT, when it applies and whether there are time limits or statutes on it, is one of the most misunderstood areas of our tax law that there is.
In your case, the property you refer to has been your investment property since around 2008, and therefore it is well within the era that CGT is charged on any property which is not your PPOR.
Being rented out is not a criteria which must apply. Whether it is rented or not, if it isn't your own home, CGT applies (unless it started out as being your own home and then you moved out). 
Under these circumstances you may qualify for the six year rule exemption, which allows you to move out for a period of up to six years and not incur any CGT if you subsequently move back in or sell.  This of course depends upon you not claiming this exemption on any other property - you can only have one exempted property at a time.
If you were to move in to this property, and had only this property on which your principal place of residence exemption was placed, it would not matter how long you stayed in it, there would still be some assessable gain for the period of time it was not your PPOR.  This is because it was an investment when you bought it and no amount of living in it can wipe this fact away.
If you go down this pathway you must keep accurate records of your purchase price and everything you spend on the property, so that pro-rated capital gains tax can be established when the time come for you to finally sell the property.
Regards,
Maragret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
Please not that due to the number of requests, Margaret may not be able to answer every question.
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mlomas-KC9MUPZ6Ca

Ask Margaret: Will CGT still apply if I move into my investment property?

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Hi Margaret,
I just read your recent reply on <a href="/news">moving out of your home and the capital gain tax that may come with it</a>.
Wonder if you could help me with this.
Just to clarify, if I stayed in my home for three years and if I sell it 10 years after moving out from it, and I have no other home, I would have to pay 4/13 of the net captital gain (method one)?
Can I get a valuation after the six years is up an calculate the gain from that date and pay tax on the difference (method two)?
I think the Australian Tax Office (ATO) website seems to deal with method one. Is method two also possible?  My six years is up in a years time and I am contemplating whether to sell since I live overseas.
Regards,
Shanthi
Hi Shanthi,
This part of the tax rules can be very confusing - and can be really hard to wrap your head around.  Where tax is concerned its really important that you contact an accountant, tell him or her your exact situation and tell him or her just how the rules apply to you, and what you will pay.
I have checked with Ian Rodrigues, my Property Success team member and tax specialist, and we talked your situation through.
You can choose to treat a property as your main residence even after you move out provided you do not choose another property as a main residence during that period and it is not rented.  This means that, if you didn’t own anything else, and you didn’t rent out this property, you can keep the main residence exemption on it indefinitely and pay no capital gains tax.
If it is rented out, however, the maximum period you can treat it as your main residence after you move out is six years.  You can move back in during the six years and the six year period will reset. If you continue to own the property after the six year period has expired,  you only get a partial exemption.
In your example, if you lived in it for three years, and then rented it for 10 years, you would have to pay capital gains tax on 4/13th of the gain.
You can't use a valuation after the six years for the basis of calculating the capital gain , but you are able to use a valuation at the date it ceased to be your main residence.  In your case, this was three years after you purchased it. The capital gain would  then be calculated as 4/10th of any gain over that market value.
You will need to get a qualified valuer to provide you that retrospective valuation if you don't have one from that time - the ATO is unlikely to accept a market opinion from a real estate agent where no valuing qualifications are held.
Again I stress that you should discuss this with an accountant who has a good grasp of capital gains tax and main residence exemptions.
Have a property question?   <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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Ask Margaret: How do I work out how much CGT I will pay on renting out my old home?

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Hi Margaret,
My partner brought a block of land in 2011. 
We were wondering whether we have a limited time to build a home before capital gains tax (CGT) is applicable to us?
Thanks in advance,
Ryan
Hi Ryan,
I am assuming that you purchased this block of land with the intent to build a property in which you will personally live, rather than build a property as an investment.  If it is to build as an investment, then of course CGT is going to apply immediately from the date of your contract to buy.
If you bought to build a house of your own on, the tax office <a href="https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Real-estate/Treating-land-as-your-main-residence/" target="_blank">has this to say</a>:
"Generally, if you build a dwelling on land you already own, the land does not qualify for exemption until the dwelling becomes your main residence for capital gains tax (CGT) purposes.
"Vacant land may also be treated as your main residence if it is vacant because your home has been destroyed.
"However, you can choose to treat land as your main residence for up to four years before the dwelling becomes your main residence in certain circumstances. You can choose to have this exemption apply if you acquire an ownership interest (other than a life interest) in land and you:
<ul>
<li>
"Build a dwelling on the land
</li>
<li>"Repair or renovate an existing dwelling on the land, or </li>
<li>"Finish a partly constructed dwelling on the land.</li>
</ul>
"There are a number of conditions that you must satisfy before you can claim the exemption. You must first finish building, repairing or renovating the dwelling and then:
<ul>
<li>"Move into the dwelling as soon as practicable after it is finished, and continue to use the dwelling as your main residence for at least three months after it becomes your main residence."</li>
</ul>
Reading this it would appear that, as long as you do not own another property on which you are also claiming the principal place of residence exemption, you have four years to have the house ready to move into.  
Make sure you check with your accountant to see how this might apply to you though, as your personal circumstances may be very different.
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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Ask Margaret: Is there a time limit to build on land before CGT applies?

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GUEST OBSERVATION
The capital gains tax laws are voluminous and complicated. But they also contain benefits for taxpayers.
Legislation introduced in federal Parliament last week – the Tax and Superannuation Laws Amendment (2014 Measures No 7) Bill 2014 – will amend the tax law to ensure that CGT exemption is available in respect of compensation or damages received by:
<ul>
<li>a trustee (other than a trustee of a complying super fund) for a wrong or injury a beneficiary suffers in their occupation, or a wrong, injury or illness a beneficiary or their relative suffers personally - and a beneficiary that subsequently receives a distribution that is attributable to such compensation or damages from the trustee; 
</li>
<li>a taxpayer for a policy of insurance on the life of an individual or an annuity instrument if the taxpayer is the original owner of the policy or instrument; and 
</li>
<li>a trustee of a complying super fund for a policy of insurance for an individual's illness or injury.</li>
</ul>
The government said it was intended that trustees or beneficiaries who receive compensation or damages in respect of certain events (such as an injury an individual suffers at work) or in respect of certain policies of insurance (such as illness, injury or death) not be subject to CGT.
However, the express wording of the relevant provisions in the tax law had created uncertainty about this treatment. It was also intended that insurance policies held by complying superannuation funds for injuries and illnesses suffered by an individual not be subject to CGT. So the legislation now introduced seeks to implement those original intentions.
Under the proposed changes, a capital gain or loss made by a trustee in relation to compensation or damages for any wrong or injury a beneficiary of the trust suffers in their occupation, or any wrong, injury or illness a beneficiary of the trust or their relative suffers personally, will be disregarded. Further, a capital gain or loss made by a beneficiary will also be disregarded if the trustee of a trust then distributes money, property or other CGT assets to the beneficiary attributable to the compensation or damages received by the trustee.
Take the following example.
Robert is the beneficiary of ABC trust, which was established after Robert fell off a roof whilst working for Roofing Inc and suffered serious injuries. Patrick, as trustee of ABC trust, seeks compensation on behalf of Robert from Roofing Inc's insurance company, and receives compensation for the accident.
Under the proposed law, the capital gain made by Patrick in relation to the compensation received will be disregarded.
Assume Robert recovers from his injuries, but requires substantial further medical and other support. Patrick, as trustee of ABC trust, distributes the compensation to Robert to assist in paying his hospital bills. Any capital gain made by Robert in relation to the compensation received will be disregarded.
The bill also proposes that a capital gain or capital loss made from a CGT event happening to an interest in a policy of insurance on the life of an individual or an annuity instrument is disregarded by the original owner of the policy or instrument.
Another example will help explain this.
Fred holds a life insurance policy from an insurance company. Fred passes away and his wife Jane, as executor of his estate, receives $200,000 from the insurance company in respect of the policy. Jane, as executor of Fred's estate pays $50,000 to Alice, a beneficiary of Fred's estate. The payment to Alice is attributable to the amount received by Fred's estate in respect of the life insurance policy.
Any capital gain made by Alice, as a beneficiary of Fred's estate, will be disregarded.
The amendments will apply retrospectively in relation to CGT events happening in the 2005-06 and later income years i.e. generally from 1 July 2005. Accordingly, the tax law has also been amended to ensure that taxpayers are given sufficient time to seek an amendment to previous assessments (as the amendment period will otherwise have expired in some cases), if required in these circumstances.
The government says the amendments are consistent with the administrative practice of the Commissioner of Taxation and ensure that taxpayers that could have benefited by relying on the Commissioner’s administrative practice are not disadvantaged by the changes.
The bill will not be debated until after Parliament resumes in February 2015, but the changes are welcome.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
Thomson Reuters <a href="https://www.propertyobserver.com.au/https://www.thomsonreuters.com.au/the-australian-tax-handbook-tax-return-edition-2014/productdetail/121906" target="_blank">Australian Tax Handbook 2014 – Tax Return Edition</a> provides information on claiming all kinds of tax deductions, including the rules relating to claiming rental properties and work-related expenses.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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thayes-XhNcNKLNWa

How CGT changes to exemptions on compensation or damages could benefit taxpayers 

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Hi Margaret,
I was reading about Capital Gains Tax (CGT) on principal residences and I was wondering if CGT is applicable on an elderly parent’s home after they have moved to a nursing home. If the home is rented out to pay for the ongoing expenses of nursing care, is CGT applicable after she has passed and the home is sold? Alternatively, if a family member lives in the home until such time as she passes, is capital gains also applicable?
Presently there is family division (as usual) about the way her assets and home should be managed.
Regards,
Katherine
Margaret Lomas' answer is on the next page. Please click below.
<hr class="system-pagebreak">
Capital gains tax is a complicated issue, and I wanted to be sure I got this right for you, so I called my Property Success resident tax expert, Ian Rodrigues, and checked that my understanding around this was correct.
If you own a Principal Place of Residence (PPOR) from which you are absent and you rent it out, you have a six year period where you can have an exemption from CGT, as long as you don’t claim another PPOR exemption. 
If you don’t rent it out, the amount of time that you can claim that exemption is unlimited. This would mean that, as long as the period did not exceed 6 years, renting it out in order to help pay those expenses would be OK. 
Once she passes, the status of the person’s CGT position shifts to those who inherit – if it is still considered her PPOR (so in that six year period) then the CGT status transfers, and the beneficiaries have two years to sell before they incur CGT.
If a family member lived there, and it was to simply take care of the place for your mother, and not a market based arrangement on the same terms as a third party tenant, then this would likely be considered to be the same as if no one lived there.
Of course, if your mother bought the property prior to 19 September, 1985, then all of the above is moot – it’s a pre CGT asset anyway and no CGT applies in any circumstance.
Always check with a good accountant or even the tax office itself though, to ensure that your own situation is covered by these rules.  It’s quite easy to get a private ruling in the event that no one seems sure and that way, you have it all in writing!
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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Ask Margaret: Is CGT applicable if an elderly resident moves to a nursing home?

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Hi Margaret,
I am going to sell my family home and move into a new home.
But it's taking time to sell, so I wanted to take my first home off the market for a while and move into the new one, then sell at a later date. 
I won’t rent out my former home, so will I avoid CGT? 
Kind regards,
Andrea
Hi Andrea,
Capital gains tax (CGT) is one of the most misunderstood concepts in property investing, but in reality it’s quite simple.
CGT is not about whether you rent out a property or not, and many assets attract CGT even though they don’t produce income for you. When it comes to CGT on your family home, it is all about which property you intend to claim as your principal place of residence (PPOR), and you can only claim one. Any other property you own, regardless of if it is rented out or not, will accrue CGT. The value that becomes the cost base upon which the gain is calculated will depend on a host of things, from when it was purchased through to when it ceased being your principal place of residence exemption.
You can move out of your  PPOR for up to six years and still maintain an exemption on it, as long as you don’t have another property for which you claim that exemption. This allows home owners to be relocated for work, or move out and rent for a time, without CGT accruing. Remember that if you buy another property in that time, you must nominate one as your PPOR, and your intention for the nominated property is that it must be genuinely a home you have intention to reside in.
You are allowed a six-month overlap, however, so that you have time to move and set up a new principal place of residence.  Be very careful on this one, though – if you go over the six months  by even one day you may end up paying some CGT on the family home, calculated in most cases on the change in value form the day you moved out until the day it sells. This might be OK if the value has not increased since you moved out, but if there has been any type of value increase since you left it, you could be up for some tax.
Try not to be too alarmed – remember  CGT is incurred on only half the gain (as long as it has been held as an asset over 12 months) and although it is tacked on to the top of your other income and calculated at your highest marginal rate of tax, this may be a fairly small amount after all.
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au">Ask Margaret!</a>
This article was first published on Property Observer in February 2013.
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Can I avoid CGT when I sell my home? Ask Margaret

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Intention is the magic ingredient that dictates how a gain from subdivision is taxed, explains Property Tax Specialists’ Shukri Barbara.
If your intention is to realize the capital gain in a property then you will be taxed differently to if your intention is to make a profit in some fashion.
Barbara provides an example of a situation where the property is used as a main residence only. In 2013, the value has increased to $490,000 – when it was purchased in 2005 it cost $250,000.
They subdivide the block, and then sell the vacant land.
Barbara explains that for this specific situation, the gain is capital – with a 50% discount available as it is a “mere realization” of capital. In this case, the cost base of the vacant block would be based on the valuation from a valuer, the Development Application (DA) costs and any improvement required by council.
He suggests to only subdivide when ready to sell, as it allows the owner to maintain the capital gain exempt status for longest, as subdividing demonstrates intention as it is solely to realize capital gains.
Subdividing early and “waiting” is an indication of intention to a profit making undertaking, he warns.
It’s also worth noting that knocking down the main residence before selling significant changes the character of the asset, and may see capital gain tax (CGT) payable. Similarly, registering for GST can also be an indication of an intention to make profit.
Here’s another example:
A couple acquire a house in 2012 and lodge a DA in 2013 to knock down the existing houe, subdivide land and construct two townhouses.
The intention – that key word again – is to occupy one as the main residence, and sell the other one to help fund the main residence.
The owners have no background in building or associated industries and no history of development.
Barbara explains that in this situation it is likely the new main residence is exempt from CGT if it is established as main residence on purchase and is occupied for a period of, say, three months.
It must also be re-occupied within four years and the dwelling must be used for at least three months after completion.
If it is not treated in this way, CGT will be apportioned over time owned.
On the second part of the property, it will be taxed as business income.
GST implications include registration, GST on a portion of the sale price, credits on materials and services on purchase.
Barbara explains that if you sell the vacant block without development it is likely to be a capital 50% discount.
However, constructing and renting out the second block shows intention of investment, which on a later sale may access 50% discount but includes issues such as cash flow.
In fact, planning is critical. In some situations, Barbara notes that the numbers may actually find the after tax position preferably with the sale of the second block vacant rather than developed.
Barbara also warns that subdivisions cannot take place in a self-managed super fund for a number of reasons, mainly because it is high risk.
He notes that the intention is not required to be formally recorded anywhere, and the tax office bases intention on the way that the actions are taken out.
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jduke-EHk3XBmHkn

Why CGT and subdivision is all about intention: Property Tax Specialists

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Hi Margaret,
I was reading one of your articles. 
I'm wondering: Say I purchase my first property but don't live there. Instead, I rent it out for income. Say 10 years later, when I sell this property, how do I avoid paying Capital Gains Tax (CGT) - assuming this is my only property in the next 10 years?
What would happen if I make deduction on the interest of the loan, or do not making any deduction at all? Is the latter legal, from the ATO's point of view?
Thanks. Wesley
To read Margaret's answer, click below.
<hr class="system-pagebreak">
When you own, and occupy, a home of your own, you may claim a 'principal place of residence' exemption on that property.
This means that, when you sell the property, you will not pay any capital gains tax on any gain you have made.
Further, if you move out of your principal place of residence (PPOR), you may rent it out, and claim any related tax deductions, for a period of up to six years and, as long as you either move back in, or sell it, before those six years are up you also will not pay any CGT. The only catch is that, during this 6 years you cannot own another property on which you would like to claim the exemption – you can only claim one exemption at a time.
The operative word here is 'own and occupy'. If you buy a property and you do not move into it as soon as it settles, then the property is not considered to be your principal place of residence until such times as you do move in, regardless of whether it is the only property you own, or not.
While you can move in at any stage and make it your PPOR, thus invoking a potential six year rule exemption at a future date when you move out, the fact that you did not live there from the moment you owned it changes a few things. You have to keep all of your records accurately on everything you spend, and then when the time comes to sell, your CGT liability must be worked out proportionately for days rented/days not rented.
Your cost base would be the cost base as at the date you bought it and then the gain is apportioned after the six year period is accounted for.
This can easily be overcome, as long as, when you buy the property, your intention is to live there and you move in when you settle, thus establishing the property as your PPOR. 
If, at a later date, your plans change and you move out, the six year period can commence, and your cost base for CGT would be the value as at the date the 6 years expire, if you don't move back in.  You can reset a new 6 year period at the end of the first by moving back in for a time.
Note that the tax office does not prescribe how long you have to stay there on either occasion – it just has to be your intention to live there and you must move in.
 
 
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