Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<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/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<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/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

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The Federal Treasurer Joe Hockey has shrugged off the Reserve Bank call for a review of the negative gearing-capital gains tax regime.
"More policemen negatively gear than specialised tax accountants, management consultants or university lecturers," Mr Hockey told 2UE radio.
"This is a way for people on medium incomes, or even lower incomes, to be able to get into the property market in a way that they may not be able to."
The bank joined the debate over how negative gearing and the 50% capital gains tax discount are making housing less affordable.
"The bank believes there is a case for reviewing negative gearing but not in isolation," the RBA said in its submission to a House of Representative's parliamentary inquiry into home ownership.
Limiting negative gearing to new houses or a certain number of investment properties are among the changes Labor is reportedly considering.
The treasurers comments stem from analysis showng the vast majority of property investors taking advantage of negative gearing are “mum and dads” earning less than $80,000 a year, countering the long-held view that the property investment measure was a tax lurk for the rich.
Australian Taxation Office data shows that of the 1.266 million Australians who declared that the rental on their investment properties didn’t meet the interest repayment in 2011-12, 883,325 earned less than $80,000.
More than 70 per cent of people who accessed negative-gearing benefits only owned one investment property. 
About 60,000 clerical staff earning less than $80,000 benefited from negative gearing, as did 54,000 teachers, 46,000 sales staff and 35,590 nurses and midwives, the data showed as reported by The Australian. 
Nick Proud, the executive ­director of the Residential Development Council, which provided the statistics suggested investors incentivised by negative gearing would reduce the future reliance on the pension.
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jchancellor-FAypfDUnLy

Policemen negatively gear property: Treasurer Joe Hockey

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The Reserve Bank of Australia has called on the federal government to review the capital gains tax break for investment property suggesting it was directing too much money into residential housing.
The call came in its submission to the federal parliament's latest home ownership inquiry.
While the Reserve Bank acknowledged in its housing inquiry submission that negative gearing can assist in keeping rents down, it noted how it worked with other tax rules "may have the effect of encouraging leveraged investment in property."
"The bank believes there is a case for reviewing negative gearing, but not in isolation," the bank said.
"It's interaction with other aspects of the tax system should be taken into account."
The RBA's suggestions follows David Murray, head of the Abbott government's financial system inquiry, seeking a review of capital gains tax and negative gearing.
The head of the government's audit commission, businessman Tony Shepherd also recently recommended lifting the capital gains tax rate to a person's own income tax rate.
"I can't see any reason to treat capital gains any different from income gains," he said last month.
"And I think it does in fact probably lead to a greater emphasis in some respects on negative gearing." 
The RBA noted the proportion of the housing stock owned by investors looks to have risen over recent decades, offsetting the decline in the prevalence of public housing.
" The investor share is also likely to have risen a little further over the past few years, as investors have accounted for an increasing share of property purchases since 2012. 
"Data on the proportion of residential property transactions that involve investors as purchasers or sellers are not readily available, but loan approvals data give some guide as to the prevalence of investors as purchasers. 
"Investors’ share of loan approvals has risen from a little over 30 per cent in 2011 to almost 40 per cent recently, with the increase most pronounced in New South Wales. 
"As noted in 2014, prudent limits on loan sizes are less binding for property investors that have significant equity to deploy than for some other purchasers. 
"Typically the interest rate used to calculate allowable loan sizes does not fall as much as actual interest rates, or only up to a point; this practice has been strengthened recently in light of recent guidance issued by APRA (2014). 
"This means the marginal borrower has less scope to increase their loan size as interest rates fall. This practice is in the long-term interest of borrowers, as it helps ensure they can still service the loan once interest rates rise again. 
"However, it does mean that borrowers for whom these constraints are not binding appear to have a relative advantage during periods of low interest rates, since they can increase their loan size and make larger offers for specific properties. 
"In the Australian environment, the most constrained borrower is usually a first home buyer and the less constrained borrowers are investors or trade-up buyers with considerable equity. 
"As such, this might help to explain the low share of first home buyers in recent new lending for housing. 
"Reductions in state government incentives for first home buyers (of established housing) could also have contributed to this outcome. 
"It also implies that the increase in investor demand is likely to have contributed to the recent strong growth in housing prices, particularly in Sydney," the bank noted.
The submission can be downloaded <a href="https://www.rba.gov.au/publications/submissions/inquiry-into-home-ownership/index" target="_blank">here</a>.
 
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jonathanchancellor-7SQnKwU6yx

RBA joins call for negative gearing - capital gains tax review

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New research conducted by Newgate Research shows Australians dislike stamp duty when asked to rank taxes in terms of fairness.
Stamp duty comes last, closely followed by land tax. 
Over two-thirds of Australians support the idea of abolishing stamp duty completely, with over half saying it made it harder for them to afford a home. 
Some 65% of respondents also rated the GST fair or very fair, with 72% believing the GST will probably or definitely be increased over the next decade.
State governments could boost the efficiency of the economy by $9 billion a year if they adopted a wider tax on all property while phasing out stamp duty, a new policy paper suggests.
Property Taxes, the second working paper in Grattan’s Budget Repair series, finds that a levy of just $2 for every $1000 of unimproved land value would raise $7 billion a year with an annual charge of $772 on the median-priced Sydney home, $560 on the median-priced Melbourne home, and lower average rates in other cities and the regions.
The Grattan Institute has suggested a tax levied on the value of property holdings would be a fairer way of funding the burden of health and education services that are rising faster than gross domestic product.
Property taxes – which Grattan institute director John Daley concedes are politically difficult to impose – are positive economically because they don't distort incentives to work, save or invest.
"Unlike capital, property is immobile – it cannot shift offshore to avoid higher taxes," the report said. 
<a href="https://grattan.edu.au/report/property-taxes/" target="_blank">The Grattan Institute</a> estimates that an annual levy of $2 for every $1000 of unimproved land value – or $1 for every $1000 of capital improved property value – would raise around $7 billion a year.
A homeowner living in a median-priced Sydney home of $772,000 would pay a levy of $772 a year. Their Melbourne equivalent would pay $560 and those on low incomes with no wealth would pay nothing, while low-income retirees with valuable houses could defer paying until their homes are sold, John Daley argues.
Mr Daley says that even higher property taxes could be used to pay for a reduction and eventual scrapping of stamp duties, which he described as among the most inefficient and unfair taxes still available to states, as well as being linked to property market volatility.
"Shifting from stamp duty to a broad-based property tax would provide a more stable tax base for states, spread the tax burden more fairly, and add up to $9 billion annually to GDP," Mr Daley said.
{mijopolls 121}
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Scrap stamp duty for property tax for everyone: Grattan Institute

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<img src="/images/2015/07/08/NBtax_PO_SponsoredLogoLink-01.jpg" alt="">
SPONSORED POST
Napier &amp; Blakeley this month are proud to launch NBtax, a breakthrough online property tax depreciation service to help property investors maximise their returns.  
Louise Hegarty talks with Chris Page, Napier &amp; Blakeley’s National Manager of New Projects about the revolutionary product that just had to happen.
“Over 70% of property owners under-claim their property tax depreciation allowances and many don't even claim them at all,” says Chris.
“It's a property investor's secret weapon for better cash flow yet sadly is widely misunderstood.  So we've created a simple solution that will help maximise a property investor’s return while making the whole process easier.”
Called NBtax, the online request service uses current technology to access Napier &amp; Blakeley's specialist property tax depreciation Quantity Surveyors.
“NBtax means investment property owners can start the process quickly and easily without the need to spend too much time going to and fro.
"Once you submit the required information, our expert teams get on with tailoring your property tax depreciation schedule, setting you up for the depreciable life of your investment.”
“We, Napier &amp; Blakeley, were the first in Australia to provide specialist property tax depreciation advice in the mid 80’s, and thirty years later we’re still the market leaders.
"A professional property tax depreciation schedule can boost your cash flow potentially by tens of thousands of dollars over the life of your investment.”
Yet many property owners stumble here, says Chris.
“A simple lack of knowledge and the specialist nature of depreciation means investors under-claim and at times even avoid the process often missing out on thousands. A poorly calculated property tax depreciation schedule is mostly likely costing you money right now!”
And no property is too old or small to benefit, Chris adds.
“Commercial, residential or industrial, brand new, renovated or just old, every investment property has the potential to further increase your cash-flow.
There's money sitting there waiting to be claimed. It's just a matter of taking the first step in the right direction, and that's where NBtax comes in.”
We all know that reducing our taxable income means one thing – more money in our pockets. It’s now easier and faster than ever before – with NBtax.
To find out more about NBtax, <a href="https://www.nbtax.com.au" target="_blank">click here</a>. 
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NBtax is here, just in time for FY2015 tax time: Napier & Blakeley

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GUEST OBSERVER
In a recent address to the Economic Society of Australia, the Reserve Bank Governor Glenn Stevens hit the nail on the head when he remarked that “monetary policy alone can’t deliver everything we need and expecting too much from it can lead, in time, to much bigger problems”.
What was particularly important in this address was the (implicit) suggestion that the answer goes hand in hand with another question; what should we expect from fiscal policy?
Though at first sight it might appear to be a rather tenuous link, a decent review of the taxation system and more generally of the revenue side of the fiscal equation, may be a big help in taking some of the burden off monetary policy from its current constraints.
Stevens is not alone in suggesting that too much might be being expected of central bankers in promoting growth and reducing unemployment. Similar sentiments have come from former Federal Reserve Chairman, Ben Bernanke.
It is useful to distinguish two aspects to the question of whether we expect too much of monetary policy. The first is whether we can expect it to work when the economy is on the downswing in the same degree as when it is on the upswing. In particular, can we expect an easing of monetary policy to stimulate growth as effectively as a tightening of monetary policy can choke it off.
Central banks for the most part have a brief of keeping inflation <a href="https://www.rba.gov.au/inflation/inflation-target" target="_blank">within a certain range</a> and, with that done, to assist in keeping the economy’s growth rate near to trend; in the best of worlds, consistent with full employment.
Expectations about what more accommodating monetary policy can do for a sluggish economy have at times had to take a reality check here and in other parts of the world. Bringing interest rates down and making the assets side of bank balance sheets more liquid via “quantitative easing” can stimulate the real economy only to the extent that the binding constraint on spending by consumers and business is a financial one.
But in an environment where producers expect sluggish or even falling domestic or export demand, one would also expect to see sluggish investment demand, regardless of interest rates or the willingness of banks to lend. In other words, slow growth in demand may well mean expected rates of return from investment in new plant are revised down as much as interest rates.
As Stevens noted in his address, lower interest rates may not help consumption expenditure much either in present circumstances, since household sector’s debt burden means that it “has the least scope [compared with government and corporations] to expand their balance sheets to drive spending”.
And, as plenty of commentators have noted, injections of liquidity and easing credit conditions may be channelled into financial assets which don’t have significant stimulatory effects on the real side of the economy, which is where we need it for growth and reduced unemployment.
Some have even argued that a lengthy period of easy monetary policy has adverse distributional effects benefiting owners of stock and property. However the precise distributional effects of seem rather complex and less than clear cut, and will depend in part on whether or not accommodatory monetary policy stimulates the economy and hence employment growth.
The second and perhaps broader aspect related to expectations about what monetary policy can and should do is that it is often asked to effectively make use of a limited toolbox to deal with conflicting objectives. One could be forgiven for thinking that in this country we have only one macro policy instrument - interest rates – to both control inflation and manipulate growth in economic activity.
The obvious elephant in the room here is fiscal policy.
In his address Stevens actually raises an old and interesting idea about fiscal policy: that it can have a stimulatory role perfectly consistent with “sound financing” (to borrow a perverted phrase with which Keynes’ was forced to do battle); where stimulatory expenditure and any increased debt are on the capital or investment side of the budget.
Such fiscal stimulus may even have what some economists refer to as a “crowding-in” effect: a positive impact on expectations about growth, as Stevens notes. This idea also provides a bulwark against the nonsense about fiscal contraction or consolidation (as it’s euphemistically called) being necessary to stimulate the economy.
The caution here from the Governor is also sound it seems; that capital expenditure is not overnight, so the confidence boost is probably more important for the short-term than the actual direct impact on government expenditure.
In any case, if fiscal policy in general and government expenditure in particular is to come back into its own as a macro policy instrument, reform of the revenue base and thus the tax system is paramount.
But note here, a significant driver of tax reform should be the sustainable funding of an expenditure side which fulfils its macro economic role as a generator of demand growth and its social role in generating infrastructure.
Tax reform should not be seen exclusively as code for a lower taxes, this being an end, the means to which to point of is government withdrawing from its expenditure responsibilities. Unfortunately, this latter view seems to dominate much discussion in this country.
From a macro policy standpoint, looking at tax or more appropriately at the revenue side of the fiscal equation may well have a positive spin-off for monetary policy, leaving it to focus, if that is the continued wish of the political masters, on inflation.
And if one is worried about complex adverse distributional effects of monetary policy, expenditure on infrastructure, done properly, would surely help redress inequality by lifting the social wage.
Graham White is Associate Professor, School of Economics at University of Sydney. He can be contacted <a href="https://sydney.edu.au/arts/economics/staff/profiles/g.white.php" target="_blank">here</a>.
 
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po-LsXgBTHBmX

When monetary policy reaches its limits, what of fiscal policy?

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NSW land tax revenues are forecast to rise at a faster rate than stamp duty revenues, according to the NSW state budget papers.
<div>There is an expected 5.7% annual average boost in land tax paid by NSW investors over the four year forward period, rising from $2.49 billion to $3.11 billion in 2018-19.</div>
<div> </div>
<div>No change in the tax rate, just reflecting growth in land values.
</div>
<div> </div>
<div>Home purchase stamp duty revenues are forecast to rise 4.2% over the period, from $7.29 billion this year to $8.6 billion in 2018-19..</div>
<div>In 2015-16 transfer duty is expected to increase by $551 million, up 7.6 compared to 2014-15, with residential duty tipped to be 11.8% higher.</div>
<div>Stamp duties remain a levels mostly introduced three decades ago.</div>
Duty is calculated on the total dutiable value of the property subject to the transaction.
<table style="height: 160px; width: 428px;">
<thead><tr valign="top">
<td>Value of the property subject to the transaction</td>
<td>Rate of duty</td>
</tr></thead>
<tbody>
<tr valign="top">
<td>$0 - $14,000</td>
<td>$1.25 for every $100 or part of the value</td>
</tr>
<tr valign="top">
<td>$14,001 - $30,000</td>
<td>$175 plus $1.50 for every $100, that the value exceeds $14,000</td>
</tr>
<tr valign="top">
<td>$30,001 - $80,000</td>
<td>$415 plus $1.75 for every $100, that the value exceeds $30,000</td>
</tr>
<tr valign="top">
<td>$80,001 - $300,000</td>
<td>$1,290 plus $3.50 for every $100, that the value exceeds $80,000</td>
</tr>
<tr valign="top">
<td>$300,001 - $1m</td>
<td>$8,990 plus $4.50 for every $100, that the value exceeds $300,000</td>
</tr>
<tr valign="top">
<td>over $1m</td>
<td>$40,490 plus $5.50 for every $100, that the value exceeds $1,000,000</td>
</tr>
<tr valign="top">
<td>
Premium Property Duty: over $3m</td>
<td>$150,490 plus $7.00 for every $100, that the value exceeds $3,000,000.</td>
</tr>
</tbody>
</table>
<div>  </div>
<div>Investors paid $2.49 billion in land tax during the current 2014-15 fiscal period, up from $2.33 billion in 2013-14. </div>
<div> </div>
<div>The benchmark tax base is the average of the last three years unimproved land value of all land owned, on 31 December of the previous year, that is above the indexed threshold for that year (as defined in the Land Tax Management Act 1956), excluding land used for owner-occupied residences, or by the Commonwealth or NSW Governments.</div>
<div> </div>
<div>The benchmark tax rate for the 2015 land tax year is $100 plus 1.6 per cent of the land value between the thresholds of $432,000 and $2,641,000, and 2 per cent thereafter.</div>
<div> </div>
<div>The government's lesser known property tax, the inner city parking space levy revenue will rise 2.3% over the period, grossing $105 million this year.   </div>
<div> </div>
<div>The recent strength in the Sydney property boom was being especially driven by properties <a href="/expert-insights/less-revenue-growth-ahead-but-nsw-state-budget-benefits-from-7-29-billion-stamp-duty-bonanza">valued over $1.2 million, the NSW State Budget revealed</a>, but the housing boom longevity is not being assumed by the NSW Treasury.</div>
<div>
No change to NSW first home buyer grants in the state budget <a href="/expert-insights/no-nsw-state-budget-first-home-grant-changes-so-5000-january-2016-reduction-deadline-looms">could intensify activity before the grant's 1 January 2016 reduction</a>. 
</div>
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NSW land tax revenue % increases to outdo stamp duty revenue growth

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SPONSORED POST
Investing in rental property through a self-managed superannuation fund offers tax advantages which, for many people, will be even greater than the tax benefits of investing in property directly. 
The first advantage stems from the fact that money going into superannuation is taxed at a low rate. 
Most people receive 9.5% of their employment income as contributions to superannuation. In addition to these employer contributions, individuals can voluntarily add up to $30,000 in pre-tax wages to their super fund through a salary sacrifice arrangement.
These types of contributions are taxed within the super fund at 15%, rather than the marginal tax rate that applies to income taken outside of the fund.
Say your annual salary is $120,000 plus 9.5% superannuation, which comes out at $11,400. 
In the 2014-15 financial year, the marginal tax rate on an income of $120,000 is 39.5% including the Medicare levy. You will pay tax of $33,347 on your salary.
The $11,400 contributed to superannuation is taxed at 15%, so the fund pays $1710 in tax. 
The total bill for income tax plus tax the superannuation fund pays is $35,057. 
If you were to salary sacrifice $30,000 of your pay into superannuation, leaving you with $90,000 outside of the fund, you’d pay $21,497 in income tax and the superannuation fund would pay $4500 in tax on the $30,000 salary sacrifice contribution. Add that to the $1710 on the $11,400 compulsory contribution and the total tax bill is $27,707.
That’s a tax saving of $7350 a year, giving you more to invest.
Tax in the fund
Earnings and capital gains made inside a superannuation fund, like contributions, are taxed at 15% while the fund is in its accumulation phase, where members are adding to its balance. 
Capital gains are also taxed at a discounted rate if the property has been held for more than 12 months. While a 50% discount applies to capital gains made on directly-owned property, the CGT discount for property owned through an SMSF is lower, at one-third of the gain. However, the total tax bill may end up being less as the following example demonstrates.
If an SMSF sells a property it has held for five years and makes a $150,000 capital gain, it would have to pay tax on $100,000 of the gain. At the 15% SMSF tax rate, the CGT tax bill is $15,000. 
The same property held outside superannuation would qualify for a 50% discount on the capital gain, so tax would be payable on $75,000. If the owner earned more than $80,000 in the tax year, putting their marginal tax rate at 39.5%, tax on the gain would be $29,625. That’s $14,625 more than the fund had to pay. 
Where SMSFs have the biggest advantage over holding property in your own name is when the property is sold after retirement. 
Capital gains and other earnings are tax-free when the SMSF members have retired and are drawing a pension from the fund. 
If the SMSF member whose property made the $150,000 capital gain above had sold the property after they retired, the fund would have paid no tax on the gain. 
In contrast, a retiree who sells a property held in their own name making a $150,000 capital gain would still have to pay tax on the gain, even if they had no other income. In this case, after the CGT discount, the person’s taxable income for the year would be $75,000 and their tax bill would be $16,682. 
Expenses and deductions
SMSFs can claim the same deductions for property expenses and depreciation as individuals who invest in property in their own name.
Deductible expenses included charges such as agent fees, body corporate fees, council rates and maintenance costs. Draft legislation released in January confirmed that if the property was purchased with borrowed money, the SMSF can also claim interest costs as a tax deduction.
In general, assets valued at over $300 must be depreciated. The fund can also claim depreciation costs for the building itself if it was constructed after July 17, 1985.
To claim depreciation, the SMSF needs to obtain a depreciation schedule, usually prepared by an independent valuer. 
Expenses and depreciation costs are deducted against the income the property generates, reducing the tax liability. 
Property held inside an SMSF can be positively or negatively geared. If it is negatively geared, it’s important to make sure the fund has sufficient cash flow to service the debt without help from outside. This can come from other investment income within the fund, or through member contributions as long as they don’t exceed the maximum amounts.
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Tax advantage in rental investment through SMSF: Forrester Cohen 

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GUEST OBSERVER
Australians know that adequate savings can help provide for a rainy day, help a family put down a deposit on a home, or ensure a comfortable retirement.
Debt also offers a way for households to make purchases that would otherwise be impossible and to achieve a higher current standard of living. Debt invested into an asset that will also grow in real value and is able to be serviced without placing too much ﬁnancial pressure on a household, is generally considered to be good debt.
The key is balance. Since the 2008 financial crisis, Australians have actually decreased their propensity to take on debt and have increased their savings. But debt rates still remain uncomfortably high and there is evidence that this savings discipline is beginning to fade. Have we grown too comfortable with debt?
<h2>Saving more, but more indebted</h2>
Bankwest Curtin Economics Centre’s second ‘Focus on the States’ report, <a href="https://business.curtin.edu.au/local/docs/BCEC_Beyond_Our_Means_Report.pdf" target="_blank">Beyond our Means? Household Savings a Debt in Australia</a> finds Australians have more debt and are more comfortable with it.
While household savings portfolios have seen an increase of 54% in real terms since 2005, household debt has risen by 51% in the same period. Many households are able to access and service this debt, with higher debts associated with higher incomes. On average, Australia’s estimated 9.1 million households have savings in the form of ﬁnancial assets of $340,900 and debts of $148,700.
However, there is a gulf between those at the top of the distribution and those at the bottom. The inequality in the distributions of household savings and debt are considerably worse than the much talked about inequality in incomes.
The average household disposable income of the top 20% of savers is less than four times those in the lowest savings quintile. However, their savings at an average of almost $1.3 million is 200 times the bottom 20%. This top quintile may receive one-third of all income, but they own three quarters of the total value of savings in the form of ﬁnancial assets.
 
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/85216/width668/image-20150616-5810-145cq3d.JPG" alt="">
Average household savings by savings quintile, Australia 2015 (mean $‘000)
The trifecta of debts, low (or no) savings and low incomes presents many low economic resource families with an unenviable challenge to maintain an acceptable quality of life for themselves and their families on a day-to-day basis.
Since the global financial crisis, the household savings rate have risen, with households exhibiting discipline in their expenditure at a time when the economic outlook was uncertain. In an economic downturn income can decline quickly while reining in spending can be more diﬃcult, for both households and governments. Debts can quickly get out of hand and become unmanageable in this situation.
<h2>Becoming used to debt</h2>
While Australian households have decreased their propensity to take on debt and have increased their savings in the post-GFC period, household debt still remains three times higher now than what it was 20 years ago. Australians are now more comfortable with debt and currently hold debt equal to 1.5 years of income, whereas in the past they had only debt equivalent to six months of annual income.
The share of debt associated with investment property loans has tripled from one-tenth to three-tenths between 1990 and 2015.
Unlike previous generations accustomed to more rigid ﬁnancial products, current households can access a greater number of ﬁnancial products, which have arguably become more complex and more ﬂexible.
This flexibility delivers beneﬁts, but with complexity comes risk and it is important to promote good ﬁnancial decisions and encourage a longer term outlook. <a href="https://theconversation.com/your-home-as-an-atm-home-equity-a-risky-welfare-tool-22000">Mortgage equity withdrawal has become a popular tool</a> to derive a higher current standard of living by using the family home as collateral.
More households now use these schemes to smooth consumption or relieve short-term ﬁnancial pressures. But this may have contributed to the average mortgage debt as a proportion of property values almost tripling over the last 25 years, rising from 10% to 28% since 1990.
 
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/85219/width668/image-20150616-5832-ijpxwv.JPG" alt="">Ratio of housing debt to housing assets, June 1990 to December 2014
 
Another issue is the use of superannuation savings to pay down mortgage balances, leading retirees to rely more on the pension.
So are we living beyond our means? With household debt to income ratios three times higher now than a quarter of a century ago, household debt up by over 50% in real terms over the last decade and the debt of those approaching retirement (55-64 year olds) up 64% in real terms, it would seem on the face of it to be true.
However, the reality is more nuanced. Household savings are growing faster than income and 8.5 cents in every dollar is being saved, and there is now $2 trillion tucked away in superannuation, while riskier investments are making way for more a more conservative approach. This is far better than we were 10 years ago, but with a note of caution that savings are again on the decline.
 
Alan Duncan is Director, Bankwest Curtin Economics Centre and Bankwest Research Chair in Economic Policy at Curtin University. You can follow him on Twitter <a href="https://twitter.com/bankwestcurtin" target="_blank">here</a>.
Rebecca Cassells is Adjunct Associate Professor, Bankwest Curtin Economics Centre at Curtin University. She can be contacted <a href="https://business.curtin.edu.au/research/centres-institutions/bankwest-curtin-economics-centre/staff.cfm/Rebecca.Cassells" target="_blank">here</a>.
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Australians saving more, but are more comfortable with debt: Bankwest Curtin Economics Centre

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The developer lobby is the boy who cried wolf in Australian real estate. He’s actually right about something and desperately wants to be heard, but no one is listening anymore.
The recurring topic is the cost of housing. It’s absorbing far too much time and energy for stakeholders everywhere, because politicians find the obvious solutions unpalatable.
If politicians stopped taxing real estate to within an inch of its life, life for home-buyers would become so much easier. The cost of a new home for a first-timer could be massively reduced. One estimate suggests the typical new home in Sydney could cost $250,000 less.
The developer lobby argues that stamp duty is the single biggest problem. I have to agree that stamp duty is an obscenity. Having to cobble together a deposit is a big enough challenge for property buyers, without having to save to pay an exorbitant and unjust tax as well.
Stamp duty on the median priced dwelling in Sydney ($752,000 according to RP Data) is almost $30,000. It’s similar sum for the same purchase in Perth, while anyone buying a home at that price in Melbourne would pay over $40,000.
It’s tantamount to paying a fine for the crime of buying a home or an investment to fund your retirement.
The developer lobby has been targeting this issue with one of its endless campaigns. It wants stamp duty scrapped. It presents some compelling evidence, but I doubt anyone important will take any notice because builders and developers have been crying wolf on multiple issues (e.g. the mythical housing shortage crisis) for years.
And its proposal overall is a massive turnoff. Its argument essentially is this: everyone should pay more tax so that the development industry can make more money.
The Property Council of Australia, arguably the most self-absorbed group in society, is suggesting that stamp duty should end and the lost government revenue be recouped by increasing the GST. 
The proposal, therefore, is that everyone should pay more for everything they buy so that real estate can be exchanged cheaper. I’m sure that’ll go over well with the general public and the politicians they elect.
The council argues stamp duty is inefficient and "a runaway cash grab that's hurting Australia's economy and locking out potential home buyers". It says the community should be outraged at figures like these:
The cost of stamp duty to a home buyer with an average-sized mortgage has increased 795% in Melbourne and 749% in Sydney in the past 20 years. 
Property owners have become Australia's largest collective taxpayer, contributing 9% of total tax revenue.
Property taxes make up as much as 46% of state, territory and local government budgets. Stamp duty alone contributes more than 20% of the total revenues of the NSW,      Victoria, Western Australia and Northern Territory governments.
The cost of stamp duty over the life of an average mortgage is now $61,542 in Sydney, $56,616 in Melbourne, $49,701 in Darwin and $35,427 in Canberra.
The Housing Industry Association, another noisy member of the developer lobby, says property taxes add around $250,000 to the price of a new home in Sydney. That, it says, accounts for 40% or $1,350 per month for the life of a home mortgage.
"Taxes on new housing are a brake on economic activity, and represent a constraint on housing affordability and labour productivity," the association's head of industry policy Graham Wolfe says.
Wolfe says stamp duty is the most inefficient tax in the system. However, he says there are many other taxes on new homes, including developer infrastructure levies, which can add $70,000 to the cost of a new home-and-land package. GST is also levied on new homes, but not existing properties, adding tens of thousands of dollars to the cost.
The problem is: state governments will never give up their property taxes. They’re addicted to them.
We’ve seen what’s happened with the ACT Government. It went to an election promising to eliminate stamp duty within a specific time frame. Now they’re reneging on their promise. They just can’t let go of all that lovely money.
And, for them, the protests of the developer lobby are just background static. No one is listening.
TERRY RYDER is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a> 
Terry was recently joined by Property Observer editor at large Jonathan Chancellor for a webinar on why research is the key to successful property investing in 2015. You can download slides and audio from the webinar here.
 
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terryryder-YECXbqmri2

State governments addicted to property tax: Terry Ryder

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Calls to curtail negative gearing or other tax concessions need to be assessed in the context of the whole tax system, Shane Oliver head of investment strategy and chief economist at AMP Capital says.
"Every time Australian residential property prices take off, calls erupt for negative gearing on investment property to be restricted or scrapped.
"Such calls are getting added currency now as some see it as a way to help close the budget deficit with a greater proportion of the dollar impact falling on higher income earners," he told the Money website.
He said any such move was of dubious merit.
Firstly, he says negative gearing is not the reason housing affordability is so poor in Australia.
"It has been in place for a long time and Australia is not alone in providing some form of “tax assistance” to home owners, as most comparable countries do," adding Americans can even deduct interest on the family home from their taxable income.
"And yet our house-price-to-income ratios are much higher."
Second, removing or restricting the deductibility of interest expenses incurred in property investment will cause a distortion in the tax system because negative gearing would still be available on other investments (so unfairly biasing investors in favour of, say, shares over property). 
"Allowing deductions for expenses incurred in producing income is a standard and common-sense feature of our tax system," he says.
Thirdly calls to curtail negative gearing or other tax concessions need to be assessed in the context of the whole tax system.
"Australia already has a relatively high reliance on income tax and the top marginal rate at 49% is at the high end of comparable countries.
"Curtailing access to negative gearing will only add to the burden on this relatively small group and act as a disincentive for work effort at a time when we should be doing the opposite."
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