For most new apartment buildings, the Owners Corporation starts life with little more than a bank account and the first quarterly strata levies.

At <a href="https://www.apartments.com.au/buildings/9-gay-street-castle-hill-9-gay-street-castle-hill-nsw-2154">9 Gay Street</a> in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>, it starts with around $7 million in reserve.

It's an unusual legacy of what was once one of Sydney's highest-profile apartment remediation projects. When the development, originally known as Skyview and built by disgraced developer Top Place, came under scrutiny by then NSW Building Commissioner David Chandler, an $11 million remediation bond was negotiated to ensure any building defects could be fully rectified.

The building underwent an 18-month remediation program, during which around $4 million of that bond was spent bringing the building up to the standard it should have been in from the outset.

After extensive inspections, all active rectification orders have been lifted. What's more, around $7.2 million remains secured for the Owners Corporation for the next 15 years.

In a twist few would have predicted, what began as a significant concern for purchasers has left the building with something almost unheard of in the apartment market: a multi-million-dollar financial reserve from day one.

[smartcode_project:default project_id=147685 project_image_fid=359136]

<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a> Executive Chairman Greg Huxley said the structure offers buyers a level of certainty that is difficult to replicate.

"The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers," Huxley said.

"Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind."

The apartments themselves have been designed with a focus on practical, contemporary living. Interiors feature Smeg appliances, stone benchtops, tiled living areas, carpeted bedrooms, 2.7-metre ceilings, floor-to-ceiling glazing, and ducted heating and cooling throughout.

Residents also have access to a range of shared amenities, including two rooftop barbecue areas, a swimming pool, children's playgrounds, secure building access, storage cages, and visitor parking.

The location continues to be one of the project's strongest drawcards. Castle Hill Metro Station sits virtually on the doorstep, providing direct connections across Sydney's expanding Metro network, while Castle Towers offers extensive retail, dining, entertainment, and service amenities within walking distance.

[smartcode_project:default project_id=147685 project_image_fid=359127]

The building, now named after its location at 9 Gay Street, comprises a diverse mix of one-, two-, and three-bedroom apartments starting from just under $600,000.

Equitifund National Sales Director Ben Hamblett said demand in the Hills District continues to be driven by buyers seeking convenience and connectivity.

"Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre," Hamblett said.

"There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living."

On top of the long-term protection afforded by the remaining $7.2 million bond, Equitifund is offering a limited-time stamp duty rebate on selected apartments.

Eligible purchasers can also secure finance options, including a 3.99 per cent two-year variable rate, loan-to-value ratios of up to 90 per cent, and interest-only lending options through EquitiCredit.

[smartcode_project_cta:default project_id=147685]

Joel Robinson

Why this Castle Hill apartment building starts with a $7 million advantage

For much of the past few years, conversations about Australia's property market have centred on the rapid growth seen in Sydney, Brisbane, Gold Coast, and Perth. <a href="https://www.apartments.com.au/developments/melbourne-vic-3004">Melbourne</a> has followed a different trajectory.

That relative underperformance is now encouraging some buyers to reassess the city, particularly those willing to look beyond short-term market movements and focus on quality property in established locations, along with the long-term growth prospects of a city expected to overtake Sydney as Australia’s most populous.

John Bekiaris, Research &amp; Market Insights at <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a>, said Melbourne's current position is attracting increasingly sophisticated purchasers.

"Melbourne continues to present one of Australia's strongest long-term investment stories," Bekiaris says.

"While other capital cities have experienced stronger recent growth, that relative underperformance is exactly what's attracting sophisticated counter-cyclical investors."

[smartcode_project:default project_id=1979 project_image_fid=363268]

Equitifund isn't just commenting on Melbourne's property market, it's investing in it.

The Sydney-headquartered capital partner has taken over the remaining apartments at <a href="https://www.apartments.com.au/buildings/victoriana-melbourne-20-queens-road-melbourne-vic-3004">Victoriana</a>, the recently completed glass-encased development opposite Albert Park Lake in Melbourne's tightly held St Kilda Road precinct.

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and built by <a href="https://www.apartments.com.au/builders/hickory">Hickory</a>, Victoriana places residents between one of Melbourne's most recognised parklands and the CBD, offering oversized two and three-bedroom apartments aimed at owner-occupiers seeking a genuine alternative to a traditional family home.

The development comprises 232 completed residences alongside a suite of resident amenities, including a 25-metre indoor swimming pool, gymnasium, landscaped entertaining areas, resident lounges, EV charging, secure basement parking and a concierge-style arrival experience.

[smartcode_project:default project_id=1979 project_image_fid=363229]

The apartments have been designed with owner-occupiers firmly in mind.&nbsp;Open-plan living and dining areas flow onto generous balconies framing views across Albert Park Lake, Fawkner Park, the Royal Botanic Gardens and the Melbourne skyline.

Kitchens feature Gaggenau appliances, stone benchtops and generous preparation space. Bedrooms include built-in robes, while bathrooms feature full-height textured tiling. Hardwood flooring and ducted air conditioning complete residences designed for long-term living.

Rothelowman's architecture takes its cues from the landscape opposite the site. Sweeping horizontal glazing references the movement of Albert Park Lake, while generous balconies and expansive glazing strengthen the connection between the apartments and the surrounding parklands. The result is a building designed to deliver the scale and amenity expected of luxury apartment living, while offering the larger floorplans increasingly sought by owner-occupiers.

[smartcode_project:default project_id=1979 project_image_fid=363284]

The location is one of Victoriana's defining characteristics. Positioned on Queens Road, residents are directly opposite Albert Park Lake and within easy reach of Fawkner Park, the Royal Botanic Gardens, South Melbourne, St Kilda Road and the CBD. With few comparable development opportunities remaining in the precinct, buyers are increasingly placing value on outlooks that are unlikely to be interrupted by future construction.

Greg Huxley, Founder of Equitifund, believes those qualities become even more valuable over time.

"Premium real estate has always rewarded buyers who take a long-term view," Huxley said.

"Victoriana represents the kind of asset that's increasingly difficult to recreate today, particularly in an established location like Queens Road."

He said rising construction costs are also changing the way buyers assess completed developments.

"When you combine an irreplaceable location with thoughtful architecture and premium finishes, you create something that becomes increasingly difficult to reproduce as construction costs continue to rise."

[smartcode_project:default project_id=1979 project_image_fid=363228]

According to National Sales Director Ben Hamblett, enquiry has been driven largely by Melbourne downsizers and buyers upgrading from smaller apartments.

"Interest in Victoriana continues to build, with strong buyer focus on the larger owner-occupier residences within the development," Hamblett says.

"Enquiry is increasingly driven by local buyers who recognise the rarity of what's on offer: park-facing apartments in an established neighbourhood where new development opportunities are becoming increasingly scarce. At Victoriana, the view is not just a feature; it's an appreciating asset in its own right."

He said interstate enquiry has also strengthened as buyers reassess Melbourne's position within the national property cycle.

"Melbourne currently stands as the most compelling entry point of any major Australian capital, and discerning buyers are beginning to recognise what those who move early always understand: the best opportunities are taken before the price rise confirms them."

[smartcode_project_cta:default project_id=1979]

Why now is the time to buy in Melbourne's premium apartment market

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

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

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From 1 July 2018 the Government will require purchasers of new residential premises to remit the GST directly to the ATO as part of settlement.
KPMG's Indirect Tax Partner Kate Law says this announcement comes as a surprise.
"It is a significant divergence from the way the GST system currently operates , where GST is collected from the supplier (developers).
"The Government has announced this change as a tax integrity measure," she noted.
Around four years ago, ATO compliance programs targeted illegal “phoenix” activity, purportedly from a number of property developers who repeatedly placed companies in liquidation with outstanding GST obligations, despite having claimed input tax credits on construction costs.
However, KPMG indicated it was not aware of industry consultation on this issue more recently.
"We question the practicality and administrative cost of imposing GST on unregistered ‘mum and dad’ purchasers.
"Where developers use the margin scheme to calculate the GST liability, the purchaser is unlikely to be aware of the amount of GST included in the purchase price.
"This measure will therefore require developers to change the way they disclose the price to ensure the GST liability is disclosed as a separate line item," it noted
The Budget papers state that this measure is estimated to increase GST revenue by $660 million and associated payments to the States and Territories, net of administrative costs, by $1.6 billion over the forward estimates period (4 years to 2019-20).
However, the Budget papers state that the difference is due to the timing of when GST is collected and recognised.
"This suggests that it is not a permanent GST difference - which is seemingly at odds with the Government’s statement that some developers are failing to remit the GST to the ATO.”
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j.ballantyne1990-6AQqhLzZaK

New residential GST surprise policy shift in 2017 Budget 

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<div class="_1FVA8dr2">A former Channel Seven Melbourne television newsreader has denied she deliberately withheld more than $1.8 million in GST payments during her property development days.</div>
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<div class="_1FVA8dr2">Simone Semmens faced a County Court of Victoria jury trial today after pleading not guilty to 10 charges of dishonestly withholding tax over a 10-year period.</div>
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<div class="_1FVA8dr2">The prosecutor Robert Barry said Semmens had purchased mansions in prestige areas, then subdividing and developing new properties on the land.</div>
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<div class="_1FVA8dr2">The case involved a property at Portsea, at Caulfield North and an earlier property in Toorak.</div>
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<div class="_1FVA8dr2">The Portsea mansion was Noorah which was bought for $7.5 million.</div>
<div class="_1FVA8dr2"> </div>
<div class="_1FVA8dr2">Rosecraddock, the Caulfield North mansion which cost $7.8 million in 2007, saw homes built within the curtilage of the 150-year-old Italianate mansion set on its then 8857-square-metre holding. It was the scene of the 2005 murder of eccentric millionaire Peter Shellard. Rosecraddock and its subdivided grounds were eventually sold, all up, for $17.4 million.
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<div class="_1FVA8dr2"> </div>
<div class="_1FVA8dr2">The Crown alleges Semmens knowingly didn't pay GST on them - failing to pay as much as $329,000 in tax per sale.</div>
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<div class="_1FVA8dr2"> </div>
<div class="_1FVA8dr2">She had the Caulfield North estate subdivided into seven properties, had the Toorak home demolished and replaced with two apartments and had an extra two homes built on the Portsea land, and then sold all the developments at a profit.</div>
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<div class="_1FVA8dr2">Barry said the former Seven Network newsreader was aware of her tax obligations via communications she had with her bank and her surveyor.</div>
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<div class="_1FVA8dr2">Semmens was a beauty queen, including being crowned Miss Victoria Grocery Industry in the 1980s, and was also the one-time corporate spokeswoman for Telstra.</div>
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<div class="_1FVA8dr2">Semmens' lawyer Ms Ashlee Cannon said it was "hotly contested" that her client was required to pay the GST.</div>
<div class="_1FVA8dr2"> </div>
<div class="_1FVA8dr2">Semmens, a US citizen, had been pulled from a California-bound plane and charged with the multi-million dollar tax offences in October 2015. Her Toorak house had been searched by police and tax investigators in March 2013.</div>
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Simone Semmens faces County Court over GST withholding allegations after prestige Melbourne property sales

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The Australian states' mid-year reviews (MYRs) revealed that revenue pressures from the housing market correction will partly offset gains from the GST funding reform, according to Moody's Investors Service.
Moody's Investors Service noted that at the same time, they expect higher-than-budgeted capital spending to become a major challenge for states as most embark on record capital spending programs, causing debt to rise more rapidly than revenue.
They added that for some states, debt will start rising from a lower level than in earlier budget projections, overall debt burdens will remain elevated over the next four years, increasing vulnerability to risks such as unbudgeted health and education reform costs.
Housing correction will partly erode revenue gains from GST reform:
Additional Commonwealth GST top-up payments will be offset by a weaker housing market according to Moody's
However, a weaker housing market will offset these gains.
John Manning, Vice President, Moody’s Investors Service said, "following strong growth in transfer duty revenue in recent years, particularly driven by very strong house prices along the Australian east coast, the MYRs forecast a larger drop in property-related revenue than previously budgeted."
"Despite already projecting lower property-related revenue in their FY2019 budgets, the larger states of NSW and Victoria now forecast further declines in transfer duty and land tax revenue as a result of weakening residential property market prices and falling sales volumes."
He noted however, "revenue projections for both states increased overall."
"Both NSW and Victoria expect to receive additional Commonwealth grant revenue to offset lower transfer duty revenue."
"Higher payroll tax revenue, mineral royalties and an upward revision to GST also increased NSW’s revenue projections, while Victoria’s projections improved due to higher payroll taxes from stronger full-time employment and wage growth," he concluded.
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New South Wales and Victoria feeling the pressure from housing correction: Moody's

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Property Exchange Australia (PEXA) has expanded the capabilities of its e-conveyancing platform in response to recent legislative changes concerning payment of GST at settlement.
The change, effective 1 July 2018, now requires property purchasers to pay GST on the price of new residential premises or potential residential land directly to the Australian Taxation Office (ATO).
Previously, developers were responsible for this payment.
The introduction of this new legislation is primarily designed to reduce the $1.8 billion owing in GST payments to the Federal Government, and to eliminate the practice of ‘phoenixing’, a process by which a company declares insolvency, but reforms under a new name to avoid paying debts and taxes.
PEXA executive Mike Cameron,said the visibility for all parties is a major benefit of a more streamlined, digital process.
"The PEXA platform provides transparency for all parties and added assurance that the new process has been adhered to," Cameron said. 
"The ability to complete GST at settlement through an e-Conveyancing transaction provides certainty for all involved in property exchange."
Australian Institute of Conveyancers (AIC) national president, Shane Jacob, said through PEXA "we have the clarity we don’t get in the paper-based world that the GST for relevant properties had been captured".
 
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PEXA streamlines GST payments on new property purchases

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Buyers of new residential property after 1 July 2018 need to be aware they will be responsible for making sure the GST on their purchase is paid to the ATO as part of the purchase settlement process. The laws are aimed at reducing tax evasion in the property development sector, that require buyers to pay the GST at settlement.
The GST will not be an additional cost to buyers as it’s already part of any contracted purchase.
The chief executive of the Property Council of Australia, Ken Morrison, said this was one of the biggest changes to the way GST was collected on property since its introduction almost two decades ago.
“Under this change, buyers of new residential properties or subdivision of potential residential land will be responsible for remitting the GST amount to the ATO on or before settlement,” Mr Morrison said.
“Previously, this was done by the developer. The overwhelming majority did the right thing and passed the GST they collected through to the ATO, but this measure has been introduced to deal with the minority who didn’t through so-called 'phoenixing'.”
The new process will mean additional steps in the settlement process for residential property buyers, including submitting forms to the ATO and separating the GST from the purchase price of the property.
This could affect up to 70,000 property transactions a year.
“People buying property after 1 July should talk to their solicitor or settlement agent to ensure they have the right arrangements in place to meet this new requirement and ensure a smooth settlement process,” Mr Morrison said.
There are transitional arrangements in place for contracts entered into before 1 July 2018 and which settle before 1 July 2020.
Mr Morrison said Property Council members had been investing in systems and staff training to support the introduction of the new process and to mimimise disruption or inconvenience to their customers.
“We’ll closely monitor the implementation of the change and continue to consult with Government on issues that may arise during the transition.”
The change to GST payment is the biggest of a number of federal and state property- related changes that come into effect on 1 July.
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Other measures include:
Federal
People aged 65 and over will be able to contribute $300,000 from the sale of their family home into superannuation
Queensland
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Additional Foreign Acquirer Duty (residential) to increase from 3% to 7%.
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New land tax category for holdings over $10m – 2.25% for individuals and 2.5%
for trusts, companies or absentee landholders.
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Waste disposal levy $70 per tonne.
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New South Wales
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Local Infrastructure Levy caps will be increased in areas not funded by the Local Infrastructure Growth Scheme:
o $40,000 for greenfield areaso $30,000 for infill areas
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From 1 July,
South Australia
ACT
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eConveyancing will replace many of the paper and manual
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processes traditionally involved in property transactions with secure online
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processes. All standalone transfers and caveats must be lodged electronically
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Final phase of the full abolition of commercial stamp duty.
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Stamp duty abolished for first home buyers who earn less than $160,000 for new or existing homes
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July 1 sees different GST rules for new residential property buyers

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A class action seeks to claim up to $100 million over allegations that GST was charged wrongfully on the sale of apartments in the ACT.  
International litigation funder IMF Bentham, which is working with Corrs Chambers Westgarth, announced the law suit to the ASX on Tuesday.
It has lodged a statement of claim with the Federal Court in NSW alleging Belconnen Lakeview, a company in the Hindmarsh Group, charged and collected GST on the sale of 352 units in Altitude Apartments when no GST was payable, The Australian Financial Review reported.
IMF Bentham has also identified 25 residential developments sold by various developers in the ACT that may fit the same criteria.
"Over 3000 unit owners in the ACT across a range of developments have already sent us their contracts, and in many cases it seems the purchaser was wrongly charged GST," IMF Bentham Sydney investment manager Oliver Gayner was quoted as saying by the AFR.
"We have given Belconnen Lakeview every opportunity to explain the conduct alleged in the statement of claim, and in the absence of any satisfactory explanation we have now determined to put the matter before the Federal Court to decide."
Assuming an average unit price of $450,000 and an average GST claim of around $40,000, as much as $100 million might be outstanding. 
The statement of claim says Belconnen Lakeview used its accountant to obtain an ATO private ruling which switched the tax status from 'taxable' to 'input taxed' shortly before sales commenced. But the company did not inform its customers, who continued to be charged GST, according to the claim.
Hindmarsh Group in the ACT did not comment.
The federal government is also worried that some developers have not remitted GST on new apartments. 
This year’s federal budget laid out that as of mid-2018, GST on new homes will be collected directly from home-buyers and not from developers. 
The new remittance arrangement is expected to add $650 million in GST revenue over four years.
 
 
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jonathanchancellor-7SQnKwU6yx

Class action seeks up to $100 million for wrong GST charges on apartment sales

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GUEST OBSERVER
If GST is payable on the sale of a strata lot, can a dissenting owner recover GST in respect of the sale of its lot having regard to Part 10 of the Strata Schemes Development Bill 2015? 
The short answer is yes, GST will most likely be recoverable as part of the “compensation value” received by a dissenting owner.
Who is a “dissenting owner”?
A dissenting owner is an owner of a lot which does not support a strata renewal plan prepared in accordance with Part 10 of the Strata Schemes Development Bill 2015. 
What is the “compensation value”?
The “compensation value” is the value of a lot determined:
• pursuant to s55 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Acquisition Act) subject to any modifications prescribed by the regulations; or  • by any different valuation method prescribed by the regulations.
The regulations are yet to be published, so it is unclear whether the regulations will specifically regulate (or modify) the manner in which the “compensation value” is calculated, and in particular whether or not  GST will be recoverable by a dissenting owner as part of the market value of the dissenting lot.
However, if the “compensation value” is to be determined solely pursuant to the Acquisition Act, then it is most likely that any GST paid (or payable) on the sale of the dissenting lot would form part of the market value of that lot, meaning that a dissenting lot owner would then recover GST as part of the overall value it receives. 
Is a dissenting owner entitled to “compensation value” for its lot?
Yes, at a minimum.
When making an order to effect to a strata renewal plan, a court must be satisfied in relation to the compensation being received by lot owners that:
• in the event of the sale of the entire strata scheme (a “collective sale”), each lot owner must receive not less than the “compensation value”; and • in the event of a “redevelopment”, the amount to be paid to a dissenting owner must be the greater of the “compensation value” of the dissenting owner’s lot and the amount which the dissenting owner would have been entitled to had they supported the strata renewal plan.
Leisha de Aboitiz, partner at William James Law and Ole Mitrevski, solicitor at William James Law. They can be contacted <a href="https://www.williamjameslaw.com.au" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Property 101: GST and strata

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GUEST OBSERVER
If you look at the efficiency of the GST – in other words, the amount of economic activity that is destroyed for every dollar you raise – the Government’s latest tax discussion paper says it is just as inefficient a tax as the income tax. It’s much less equitable though. The income tax is paid disproportionately by those further up the distribution and the GST hits those down the bottom. – Andrew Leigh, Shadow Assistant Treasurer, <a href="https://www.andrewleigh.com/the_gst_is_inefficient_and_inequitable_so_why_raise_it_rn_drive" target="_blank">interview</a> with Patricia Karvelas on RN Drive, July 20, 2015.
There are two parts to the Shadow Assistant Treasurer’s statement. In the first part, he simply cites a Treasury report that shows that the GST is as efficient – or inefficient – as the income tax. The second part states that the GST is less equitable as “the income tax is paid disproportionately by those further up the distribution and the GST hits those down the bottom.”
A spokesperson for Dr Leigh said:
In terms of data supporting the statement, I’d refer you to p.25, chart 2.9 of the government’s <a href="https://bettertax.gov.au/files/2015/03/TWP_combined-online.pdf" target="_blank">Re:think tax discussion paper</a>. This shows that the GST and flat rate labour income tax have an equivalent marginal excess burden, according to Treasury modelling.
What do economists mean by an efficient tax?
There are both direct and indirect costs associated with raising taxes. Direct costs include those that are incurred in the collection of the tax. While direct costs are not insignificant (the Australian Taxation Office employs over 20,000 people), economists consider the indirect costs of taxation to be more relevant. These relate to the distortions that a tax creates.
For example, a tax on apples raises the price of apples to consumers and importantly makes apples relatively more expensive than say oranges. This will lead to consumers buying fewer apples and perhaps more oranges. While the government raises revenue in this process, the tax distorts the behaviour of consumers with possible impacts on the production of oranges and apples.
The efficiency loss is the reduction in welfare, usually measured in dollars, from a consumer buying fewer apples than what she would like to because of the tax, and also any distortions in production.
Is the GST as efficient (or inefficient) as the income tax?
To apply this idea in the current context, an income tax will reduce the remuneration of a worker, relative for example to other non-remunerated activities such as leisure.
Thus, in theory, an income tax could impact on one’s decision of how much to work (or whether to work at all). The GST, however, raises all prices except for goods and services not subject to it.
There lies the conceptual reason for the GST to have a similar impact than an income tax; individuals care not about the dollar amount they receive as wages but rather about the goods and services that they can purchase from their wages over their lifetimes, including savings and bequests.
Let me illustrate this with an example. Here I assume that there is no borrowing or saving, a flat income tax of 10% and a broad-based GST of 11.11%. Consider an individual on a $50,000 income. After paying taxes, she has $45,000 left to spend on goods and services. In this case, $50,000 expenditure on goods and services would include GST of $5,000. That is, both taxes would allow the consumption of $45,000 of goods and services and, as a result, should lead to similar behavioural impact and distortions.
This theoretical argument is borne out by <a href="https://www.treasury.gov.au/~/media/Treasury/Publications%20and%20Media/Publications/2015/Working%20Paper%202015%2001/Documents/PDF/TWP2015-01.ashx" target="_blank">Treasury modelling</a>. Chart 33 from the report is reproduced below. It estimates the “marginal excess burden” (MEB) of different taxes.
The MEB is measure of efficiency loss that captures the decrease in the future ability to spend across the economy per dollar of revenue raised from a tax. These estimates are derived using a long-run economic (computable general equilibrium or CGE) model where households are captured by a representative economic unit.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/89446/area14mp/image-20150723-22849-1anubmx.png" target="_blank">Click to enlarge</a>
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/89446/area14mp/image-20150723-22849-1anubmx.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/89446/width668/image-20150723-22849-1anubmx.png" alt=""></a>
The chart reports the marginal excess burden of a number of taxes including a stylised personal income tax (represented by a flat rate), a stylised tax on labour income only and the GST. An out-of-model calculation for a marginal tax rate of 25% is presented as an illustration of an average taxpayer in 2011-12. As it can be seen in the chart above, the MEB estimates for the GST and the stylised income tax are nearly identical.
Is the GST less equitable than the income tax?
To answer this question, I need to define a couple of simple terms.
A tax system is regressive if the tax paid, as a fraction of income, decreases with income. A common view of the GST, reflected in the Shadow Treasurer’s statement, is that poorer households pay proportionally more than do richer households. Conversely, a tax system is progressive if the tax paid, as a fraction of income, increases with income. By design, the income tax rate faced by individuals in Australia increases with their income.
The table below uses a survey of households undertaken by the Australian Bureau of Statistics (ABS) to shed light on this question. It shows the average amount of GST, taxes and net income per income quantile for the 2009-2010 financial year. Net income includes pensions, family tax payments, and other benefits, and excludes tax paid on income. As expected, the income tax is clearly progressive. The amount of GST as a fraction of gross income varies considerably less across most of the income distribution, although it is overall decreasing, with the exception of the lowest quintile who pays a much higher fraction of their gross income as GST. Taxes and GST paid as a percentage of average weekly household gross income per income quantile (2009-2010).
However, looking at the fraction of GST paid and income may be misleading as incomes are volatile and spending can be smoothed via borrowing and savings. To take this into account, I report below the amount of GST paid as a fraction of total expenditures, which is likely a better measure of the level of spending that households can sustain. Once again, the lowest quintile pays substantially more GST as a fraction of expenditures, but there is a small variation for the other groups.
Verdict
The Assistant Shadow Treasurer is correct that the efficiency of the GST as a tax is similar to that of income tax. He is also correct that the income tax is more progressive than the GST and that the GST hits disproportionally those in the bottom of the income distribution.
However, while technically the data above suggests that the GST is a regressive tax, the difference between the fraction of income or expenditures paid in the form of GST is small amongst the various quantiles of the income distribution, with the exception of the poorest.
Review
I concur with the comparative distribution effects of the GST and personal income tax.
In the case of relative efficiency effects, because the income tax in practice falls on capital income as well as labour income and because it has a progressive rate schedule, it has additional distortion costs to those assessed with a flat rate tax on labour income considered in the FactCheck.
First, income tax applies to <a href="https://www.wisegeek.org/what-is-capital-income.htm">capital income</a> (for example, stock dividends) as well as to labour income. Capital income tax distorts aggregate saving versus current expenditure decisions. The hybrid Australian capital income taxation of different saving options distorts the composition of savings between one’s home, other property, bank deposits, superannuation and so forth.
Second, while the GST has a flat rate of 10%, the income tax rate schedule is a progressive one with marginal rates from zero to 49%. With efficiency costs increasing more than proportionately with the tax rate, a progressive tax rate generates larger distortions on average than a flat rate tax.
Accepting the comparative efficiency and distribution effects of the GST and income taxes, most sensible suggestions for taxation reform which involve a more comprehensive base and/or higher rate GST to reap efficiency gains from a tax mix change also propose that some of the GST revenue gain be recycled as higher social security rates and a lower but more progressive income tax rate schedule to maintain the effective purchasing power of the poor.
John Freebairn is professor, Department of Economics at University of Melbourne and an author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/john-freebairn-90" target="_blank">here</a>.
 
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po-LsXgBTHBmX

Is the GST as efficient but less equitable than income tax? Factcheck

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The property developer, Peter Icklow, chief executive of Monarch Investments, said real estate would be adversely affected by any GST hike.
"It's going to whack another $50,000 on every new home," he told The Australian Financial Review.
It follows debate over lifting the GST to 15%.
NSW Premier Mike Baird says he was willing to talk about the issue. 
Under the current rules, new homes are subject to the GST, which adds roughly 10% to the price, but buyers of established homes pay nothing.
The Urban Development Institute of Australia says at the current GST rate of 10%, a new home sold at Australia's median dwelling price of $571,500 included a GST component of $51,955.
A white paper on tax reform will be released by the end of the year.
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