Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Property Taxation

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SPONSORED POST
Capital gains can make up a significant proportion of your investment return on a rental property.
The capital gain is the difference between the sale price you receive when you sell and the cost base. The cost base includes the purchase price, plus buying expenses and the cost of any improvements or repairs you needed to make before you started renting the property out.
If you sell your investment property at a profit, you’ll usually have to pay tax on the capital gain.
Capital gains tax is not charged at a at rate, but rather at your marginal tax rate.
In general, you’ll receive a 50 percent CGT discount if you’ve owned the property for more than 12 months, so you’ll be liable to pay tax on only half of the gain. 
For example, if you bought an apartment in 2002 for $285,000 including purchase costs and sold it in 2016 for $500,000, the capital gain is $215,000. Since you’ve owned the property for more than a year, you’ll receive a 50 percent CGT discount when tax is calculated. That means $107,500 of the gain is taxable at your marginal tax rate for the year.
This ruleapplies to properties purchased on or after September 21, 1999 when the CGT discount was introduced for pro ts made on assets that had been held for more than 12 months.
Different rules apply to properties purchased before September 21, 1999 and there are many exceptions.
VARIATIONS
CGT was introduced on September 20, 1985. If you bought the property before that date you won’t usually have to pay tax on profits from selling.
The family home is also exempt from CGT. But you will have to pay CGT on pro ts made in selling a holiday home or other investment property that you don’t rent out. You may be able to include the costs of ownershipin the property’s cost base, which would reduce the CGT liability.
Special rules also apply to capital gains made on properties you’ve inherited, and to gains you make where your investment property started out as your primary residence or became your home after having been rented out for a period of time.
INVESTMENT LOSSES
Some investors make a capital loss when they sell their rental property. In this case, the loss can be offset against capital gains made on other investments.
If you made a net capital loss during the year, you can carry it forward and deduct it from capital gains you make in future. Capital losses can only be deducted from capital gains: you can’t claim a capital loss against income you’ve earned.
The CGT rules can be complicated. It’s wise to seek professional advice to see what applies in your situation. 
To download a free ebook on new financial year taxation tips for property investors,<a href="http://propertyobserver.com.au/forward-planning/tools/ebooks-and-webinars/55208-new-financial-year-tax-planning-tips-for-property-investors" target="_blank"> click here</a>.
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po-LsXgBTHBmX

Capital gains and rental property investment returns

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EXPERT OBSERVER
The latest report by the Centre for International Economics demonstrates that Sydney has the worst planning system in Australia with 50 percent of the cost of a new house going to taxes and red tape.
The report was commissioned by the Housing Industry Association to compare housing costs in capital cities and Sydney has the largest extra cost of all Australian cities.
The report demonstrated that tax and red tape was 50 percent of the average new dwelling in Sydney compared to 37 percent in Melbourne, 33 percent in Perth, 32 percent in Brisbane and 29 percent in Adelaide. The total extra cost for Sydney was $840,874 compared to an extra cost in Adelaide of $436,165.
The report found that a large number of reports are now required for the planning application for a new home with reports required for soil tests, native vegetation protection, contamination, heritage assessment and traffic management. An earlier research project by the Urban Taskforce found that some Sydney councils require up to 27 reports for a development application for a simple house.
We also found that there were 81 separate reports required for residential DA's across all of the Sydney councils. Clearly some of these reports are necessary to assess a development application but the number of expensive specialist reports has grown dramatically, adding even more to the cost of building homes.'
The Urban Taskforce is most concerned that more taxes and levies are coming in New South Wales due to the removal of the cap on local infrastructure levies from July 1, 2020. The cap had been $30,000 for greenfield homes and $20,000 for infil homes but these caps are being incrementally increased until no cap applies from next year.
We believe some councils will add $100,000 for a greenfield home which will simply be passed on to home purchasers which is $70,000 more than the previous cap. Sydney will then have a tax and red tape cost of closer to 60 percent of the cost of a new home.
While the Centre for International Economics report focussed on house and land packages a similar disproportionate extra cost is added to apartments. Apartments in many cases must also contribute costs to council affordable housing schemes and in Parramatta contribute $20,000 to the light rail project.
While we do not in any way condone poor construction standards it is likely that the excessive planning delays for most projects combined with the massive extra costs from levies and red tape are putting pressure back on the cost of building and this needs to be considered by the NSW Building Commissioner.
The Urban Taskforce is very concerned at the downturn in housing approvals in Sydney and the evidence of such excessive extra costs for each home is making the situation worse.
The NSW Government must urgently review the excessive costs and excessive red tape to bring Sydney more on a par with other Australian cities. The federal Minister for Housing, Michael Sukkar, was reported as saying the states, particularly New South Wales, must reform their planning systems and the Urban Taskforce agrees with his assessment of the fundamental problem with housing supply in New South Wales and particularly in Sydney.
Leadership is required from the NSW Minister for Planning, Rob Stokes, and his Department of Planning, Industry and Environment to get a better and faster planning system that delivers more affordable housing.
CHRIS JOHNSON is the Urban Taskforce CEO 
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cjohnson-8xfqfuuCSq

Half the cost of a new Sydney home is taxes, levies and red tape: Chris Johnson

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Despite the rejection of Labor's dangerous negative gearing tax experiment, there is no doubt property owner occupiers and investors face the prospect of an uncertain policy horizon.
Inevitably there will be higher taxes and fewer concessions in the years ahead.
All Federal governments, Coalition or ALP, along with state governments and local councils have become over reliant on the revenues from the property owning class.
Despite the continuing price downturn, recent ABS data highlighted their dependancy. Total NSW property tax revenue in 2017-18 was $8.3 billion in NSW.
Across Australia state and local governments collected more than $30 billion in taxes in 2017-18 – which was $9 billion higher than five years prior.
Cameron Kusher from CoreLogic did some analysis indicating it was five percent higher over the year, slightly slower than the eight percent prior year increase.
Land taxes ($9.153b) increased nine percent over the year and municipal rates ($18.4b) were up four percent.
Local government relies exclusively on property taxes, while state governments secure around 14% of their tax revenues from property.
These figures don’t include the property’s contribution through payroll taxes, and the Federal government's company tax, capital gains and GST.
As taxes such as stamp duty are inefficient, restrictive, and responsible in part for boosting housing prices, there's likely to be the need for comprehensive reform.
This will likely see a wider net of revenue raising across all property owners.
Presumably any reform will need to be discussed away from heated election campaigns seeking a bipartisan approach to come up with not just the right policy, but genuine grandfathering and the best time for introduction.
The recent campaign saw Bill Shorten attacking “vested interests” waging a “scare campaign” against his negative gearing policy pinpointing "real estate agents defending their commissions.” 
Unlike the subdued criticism during the 2016 boom time election, the Shadow Treasurer Chris Bowen hit huge headwinds given the property market confidence was in decline.
Commentators including Peter Switzer were loudly suggesting the policy had the potential of sending property prices off a cliff on its January 2020 introduction along with seeing rents rise for tenants.
Mr Bowen's comments around negative equity didn't assist his case.
Defending the plan to scrap negative gearing entitlements for many would-be investors, Mr Bowen spoke on his own brush with negative equity.
“I mean sometimes lots of people go into negative equity when the housing market does fall," Bowen said.
“I remember when I first was in the housing market I went into negative equity for a while. You look at it carefully, but unless you actually sell, then you haven’t actually lost any money. The market does come back.”
Bowen had bought at Smithfield, in Sydney’s west, paying $470,000 in boom time May 2003. It was at the market peak, ahead of the 2004 crash. By mid-2004, Bowen was busy building a two storey home.
His negative equity comments were picked up by commentators as having “dubious logic," but Bowen dismissed the backlash saying homeowners were concerned their children and grandchildren got a fair go when they turned up at auctions and competed with investors.
The deputy Opposition leader Tanya Plibersek suggested first-home buyers needed to be shielded from investors buying their “30th investment property.”
It vastly overstated the investment landscape as 70 per cent of Australians who negatively gear own just the one property.
According to the Australian Taxation Office, less than one percent of the nation’s 1.3 million negatively geared investors own six properties or more.
This article first appeared in The Daily Telegraph.
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jchancellor-FAypfDUnLy

Why Australian home owners still face higher property taxes?

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The ATO have announced they are set to clamp down on rental deduction submissions this coming tax time.
They will more than double the number of audits on rental deductions.
The government has recently allocated additional funds to the ATO to extend its program of audits and reviews of rental properties.
More than 2.2 million Australians claimed over $47 billion in deductions in the financial year 2017-18.
In 2017–18, the ATO audited over 1,500 taxpayers with rental claims, and applied penalties totalling $1.3 million. 
Assistant commissioner Gavin Siebert says that this year the ATO has made rental deductions a top priority.
“We expect to more than double the number of in-depth audits we conduct this year to 4,500, with a specific focus on over-claimed interest, capital works claimed as repairs, incorrect apportionment of expenses for holiday homes let out to others, and omitted income from accommodation sharing,” Siebert said. 
“A random sample of returns with rental deductions found that nine out of 10 contained an error.
"We are concerned about the extent of non-compliance in this area and will be looking very closely at claims this year,” he said.
When it comes to dodgy claims, the ATO’s detection methods are becoming more advanced.
“We use a range of third party information including data from financial institutions, property transactions and rental bonds from all states and territories, and online accommodation booking platforms, in combination with sophisticated analytics to scrutinise every tax return,” Mr Siebert said.
“Where we identify claims of concern, ATO staff will investigate and prompt taxpayers to amend unjustifiable claims. If necessary, we will commence audits,” he said.
“Over-claiming robs the whole community of essential services and will not be tolerated by the Australian community.
“Once our auditors begin, they may search through even more data including utilities, tolls, social media and other online content to determine whether the taxpayer was entitled to claims they’ve made,” he said.
No penalties will apply for taxpayers who amend their return due to genuine mistakes, although deliberate attempts to over-claim can attract penalties of up to 75% of the claim.
Last year a taxpayer was penalised over $12,000 for over-claiming deductions for their holiday home when it was note made genuinely available for rent.
They blocked out the home over seasonal holiday periods.
<h2>Key issues the ATO is checking this tax time</h2>
<h3>Is loan interest being claimed correctly?</h3>
If you took out a loan to purchase a rental property, you can claim interest (or a portion of the interest) as a deduction. However, if you use some of the loan money for personal use such as paying for living expenses, buying a boat or going on a holiday, you can’t claim the interest on that part of the loan. You can only claim the part of the interest that relates to the rental property.
<h3>Do you know the difference between capital works and repairs?</h3>
Repairs or maintenance to restore something that’s broken, damaged or deteriorating are deductible immediately. Improvements or renovations are categorised as capital works and are deductible over a number of years.
Initial repairs for damage that existed when the property was purchased, such as replacing broken light fittings or repairing damaged floor boards, can’t be claimed as an immediate deduction but may be claimed over a number of years as a capital works deduction.
<h3>Do you have a holiday home?</h3>
A holiday home is different to a rental investment property. A holiday home is generally a private asset you use for family holidays, for which you cannot claim expense deductions.
However if you let your property out at ‘mates rates’ (ie below market rates to family and friends) you can claim expenses up to the amount of income you receive. If your property is genuinely available for rent – which means making it available during key holiday periods, keeping it in a condition that people would want to rent it, and not unreasonably refusing tenants – it becomes more like a rental investment property and you can claim deductions for the days it is either rented or is genuinely available.
<h3>Have you kept records?</h3>
The number one cause of the ATO disallowing a claim is taxpayers being unable to produce receipts or other documents to support a claim. Furnishing fraudulent or doctored records will attract higher penalties and may also result in prosecution.
<h3>Dealing with disasters – Damaged or destroyed property</h3>
For taxpayers whose income-generating investment properties are damaged during a natural disaster, the ATO has a range of support, advice and guidance available.
If your personal assets – such as your home or household goods – are damaged or destroyed in a disaster, there will generally be no tax consequences if you receive an insurance payout.
However, if an income-producing asset, such as an investment property, is damaged or destroyed, you’ll need to work out the correct tax treatment of insurance payouts you receive and your costs in rebuilding, repairing or replacing the assets.
The impacts of a natural disaster may affect the types of expenses you can claim and the income you need to declare for your rental property.
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jonathanchancellor-7SQnKwU6yx

ATO to double audits scrutinising rental deductions

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Harry Triguboff, Australia’s biggest builder of apartments, has hit out at hefty taxes levied on his apartment property empire, revealing to The Australian his Meriton group’s projects and its unit buyers paid about $650 million into federal, state and council coffers over the past financial year.
As NSW’s largest unit developer, Meriton’s many offshore buyers will be hit by a doubling of a tax surcharge targeting them from 4 to 8 per cent as Triguboff warns developers face the prospect of absorbing the tax hit themselves.
Triguboff, who is concerned about the broader effects of falling prices on the economy and the property sector, is fed up with the tax contribution both from his developments and the heavy levies on buyers.
Referring to his own bills, Triguboff said it was “one mighty big contribution from one man and one company".
“So why do governments make it so hard for Meriton and other major players who have track records, know what they are doing, and create thousands of jobs?”
“The more governments encourage developers, the key players in Australia’s biggest industry, the more dollars they’ll reap,” he said.
“It’s no good putting a foot on our throats and then wondering why the tax tills aren’t still loudly ringing.”
He revealed that last financial year, Meriton payments to the federal government via GST, company tax, and tax on employees totalled $295m.
The NSW government made $46.1m from stamp duty on property purchases by Meriton and from Meriton-related payroll tax.
Stamp duty paid by Meriton customers to Queensland and NSW totalled $83.6m. “Then there’s personal and company taxes, plus payroll tax, paid by our vast array of subcontractors. That comes in at well over $120 million.”
 
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Triguboff hits out at tax policies on apartment owners and developers 

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An app that eases property tax management has been shortlisted as a finalist in the Optus MyBusiness Awards in the Fintech Business of the Year category.  
Abakus Apps, founded in 2015 by Brenton Tidow, was launched July 2016 and is designed to help users self-manage their investments, tax returns and get an estimate of their tax position at any time during the financial year..  
Brenton Tidow, Abakus Apps founder said as an active property investor, Abakus Apps was created from the frustration of handling 'pesky' expense receipts relating to investments and he wanted to develop a unique and intuitive tool that uncomplicated property tax.
“The MyBusiness Awards are well-known as one of the most prestigious national awards programs that celebrate some of Australia’s best and most innovative businesses and individuals," he said.
"To be a finalist is a massive achievement for me personally, as I’ve bootstrapped the business myself and I’m involved in every aspect of its operations."
Abakus Apps is a subscription, cloud-based app with a monthly fee of $5.99 for an unlimited number of properties (paid through the iTunes Store or the Google Play Store).
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Property 101: Abakus Apps announced 2016 MyBusiness Awards Finalist for property tax software

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The taxman's clock is ticking.
The October 31 deadline for filing the tax returns has gone and failure to do so may attract penalties.
If you are a property investor, it might be a good time to lodge your tax returns as you can reduce your taxes due to depreciation.
According to the ATO website, the deadline applies to all individuals and trusts where one or more prior year tax returns were outstanding as at June 30, 2016.
If you get your return right, you will likely receive your Notice of Assessment over the next few weeks. If a refund is due, it will come around the same time as the Notice of Assessment.
Property Observer has an eBook on depreciation which will assist property investors which you can download <a href="http://propertyobserver.com.au/forward-planning/tools/ebooks-and-webinars/59939-four-property-depreciation-myths-that-investors-need-to-know-washington-brown" target="_blank">here.</a>
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Taxman's October 31 deadline gone, get your return in order

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GUEST OBSERVER
It doesn’t take much to comprehend how many residential apartments are being constructed across south-east Queensland. 
There are a huge number that will be crying out for buyers over the next couple of years and, despite the fact some of these buyers are sure to be investors from either interstate or offshore, the Palaszczuk Government has introduced a 3 percent stamp duty charge for foreign buyers looking to invest in the state.
New South Wales and Victoria have both introduced the same surcharge in recent months, which gave Queensland a fantastic opportunity to stand out in the crowded Australian property market.  Had Queensland bucked the trend, foreign investment in the Sunshine State would undoubtedly have increased.  
Attractiveness is key for Queensland. The number of residential apartments set to come online over the next 12 months means the state needs a point of difference. Currently, it still imposes duty on a number of things that other states do not, which, put simply, makes it a less desirable jurisdiction to set up business. 
Instead of imposing a foreign investor surcharge, Queensland could have presented itself as one of the few jurisdictions that does not impose a foreign investor surcharge and used that to attract foreign investment, leveraging its point of difference to other states.
New South Wales set a fantastic example in its June budget, proving there are ways to counteract the introduction of this surcharge. 
Treasurer Gladys Berejiklian announced a 4 percent foreign investor surcharge on purchases of residential properties; this is a greater charge than the Palaszczuk Government’s 3 percent. 
However, Ms Berejiklian also announced the duty on transfers of business assets will be abolished. The Palaszczuk Government chose not to abolish this duty.  
This decision makes the foreign investor surcharge in New South Wales far more palatable. Even if New South Wales does see a decline in foreign investment it will be countered by the new businesses setting up shop. 
Compare that with Queensland, which has kept both charges, and the state is becoming less attractive a jurisdiction for either business or foreign investment when pitted against a state like New South Wales. This demonstrates that for businesses and investors it is really about the overall tax mix, not just changes to individual taxes. Getting the mix right is crucial to ensuring ongoing investment to drive growth.
While ’foreign investment’ can be a scary term for some to digest, the reality is it’s a completely viable and logical way to handle any oversupply in the residential property market which, based on recent advice, appears to be a real possibility.
But it’s not all doom and gloom. Queensland can take solace that regardless of any other duties or charges, it still has a lower charge for foreign investors than New South Wales’s 4 percent and Victoria’s 7 percent. This, coupled with Queensland’s more competitive house prices, should hopefully minimise the impact of the surcharge on foreign investment in Queensland.
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Hung Tran is private clients partner with BDO Brisbane and Leisa Rafter is tax partner. They can be contacted <a href="https://www.bdo.com.au/en-au/brisbane" target="_blank">here</a>.
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Property 101: QLD foreign buyers surcharge

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
In the current housing tax debate a number of studies have come out arguing that while prices will fall (by varying amounts) rents will not be affected. That rents will be unaffected is surprising and (in my view) wrong.
Outside of the heat of an election, the Henry Tax Review’s comprehensive review of the tax system argued for lower taxes on savings, a proposition that most economists would regard as unexceptional. (There is now a (small) school of thought arguing for higher taxes on savings but this author for one does not subscribe to that.)
Specifically, the Henry Review recommended the marginal tax rates on interest and rental income should be 40 percent lower; for example, the 35 percent and 45 percent income tax rates on labour income would be lowered to 21 percent and 27 percent. For property investors these rates would also apply to capital gains and net losses, thereby reducing the value of negative gearing.
For ‘ungeared’ investors (those who do not take on debt), the effective tax rate would be lower while for highly geared investors the effective tax rate would be higher, leading to less incentive to leverage (making the Reserve Bank of Australia happy). Overall, the effective tax rate for the “average” investor would be higher.
Now the Henry Review acknowledged that its proposed changes would, by lifting the user cost of capital of investors, lift rents. It therefore explicitly said that its proposed changes would need to be accompanied by measures to both lower the cost of housing by removing supply constraints, and to lift levels of rental assistance for households in the private rental market. In short, it did not see the increases in rents as immaterial.
If the increase in user cost of capital (on investors who are ‘geared’ by borrowing money to invest) with the Labor proposal is higher (roughly double), on what basis could rents not rise? It is not evident to me.
The key component of the user cost of capital, and the one which varies the most over time, is interest rates. When interest rates rise or fall, we expect prices to fall, or rise. But interest rates also change rents, since rent = user cost × value of house.
And what we also see is that a rise in interest rates causes the rent-price ratio (that is, the ratio of home prices to annual rent, also referred to as the rental yield) to rise, while a drop in interest rates will see it fall.
To illustrate, consider Melbourne for the period 1991-2014 when interest rates have fallen significantly and the rent-price ratio has followed suit. This has seen prices increase significantly (4.9 percent pa in real terms), and faster than the rise in costs (3.2 percent). In inner areas where there is a significant location premium (over living at the urban fringe), the rise in prices has been fastest (5.8 percent) as the value of that location premium has been bid up.
That is, most of the change in the rent-price ratio has come from rising prices. On the other hand, in the outer areas, where there is no location premium and the value of a house is the structure plus the cost of land, prices (3.4 percent pa) have moved in line with costs (3.2 percent pa) but rents have risen much more slowly (1.4 percent). That is, rents explain the decline in rent-price ratios.
So, while the assumption of most commentators is that price movements do the work in changing rent-price ratios, and that is so over the short term, over a longer time span, rents do some of the adjustment.
Changes in interest rates are uncontroversial. But the same principles apply to changes in tax if they change the cost of capital, which is why the Henry Review expected rents to rise.
In the case of the Labor’s negative gearing changes, the waters are muddied for some by its proposed exemption on new housing. A couple of points here. Firstly, ABS figures are quoted to suggest that investors’ purchases are 93% established housing, and only 7% new housing. This significantly understates the role of investors.
The NAB residential property survey has domestic investor purchases of new housing at about 20-30% - that is, domestic investors are already a significant component of the new market (adding to supply!).
Secondly, Henry also expected a change in the mix of landlords to consolidate from one with a large number of small landlords, to one with a smaller number of large landlords. More marginal investors – middle income/low wealth investors – will be the first to vacate the field as their entry point is typically cheaper, old stock not premium new stock.
High income/low wealth investors will have the option of new dwellings. High income/high wealth individuals will benefit from the higher rents and lower prices on established dwellings.
That is, the ownership of the dwelling stock (and tax benefit!) will shift to the top end of income earners. But it is not clear that the special treatment of new housing will add materially, if at all, to supply of new dwellings.
In short, the law of unintended consequences will apply. Logic says that rents will rise, and with the 30 percent renting in the private market skewed to low income earners, that means housing affordability will have declined for these people.
Nigel Stapledon is Andrew Roberts fellow and director Real Estate Research and Teaching Centre for Applied Economic Research, UNSW Australia and an author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/nigel-stapledon-269708" target="_blank">here</a>.
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