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

Taxation

<html><body>
GUEST OBSERVER 
If you are selling your home, you can claim the main residence tax exemption for the property you live in, including the land adjacent to it and other structures associated with the property like a separate garage or laundry. 
The main residence exemption includes compulsory acquisition of the main residence.
A residence or dwelling is a property used mainly for residential accommodation, including a cottage or home, a flat or apartment, a strata title unit, a unit located in a retirement village and a house boar, caravan or mobile home.
The land covered by the main residence exemption is close to, near, adjoining or neighboring the dwelling.
To be tax exempt, the land and dwelling should be sold together and the owner should have used the land mainly for private and domestic purposes with the dwelling. The total area should also not be more than two hectares. If it is more than two hectares, the owner can choose which two hectares will be exempt and the remainder will subject to CGT.
A home unit or flat usually comes with areas that are separate physically from the unit, such as a store room, laundry or garage.
If these areas were used primarily for private and domestic purposes associated with the unit, they will be exempt from CGT as well. However, if these structures are disposed separately from the unit or flat, the capital gain or loss will not be exempt from capital gains tax.
Ed Chan is founder and non executive chairman, Chan &amp; Naylor Accountants and can be contacted <a href="https://www.chan-naylor.com.au/">here</a>.
</body></html>

echan-hSGJw4wwC5

Is your adjacent land or separate structure exempt from CGT? Ed Chan

<html><body>
<img src="https://counter.theconversation.edu.au/content/81551/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
There is very little, if anything, to commend discretionary trusts. The benefits they bring, and it’s hard to see many, are dwarfed by their destructive and damaging features.
Trusts are usually used to allocate money to members of a group, usually a family. Under a discretionary trust, the only way a beneficiary will get income or capital from the trust, is if the trustee chooses to give them something. Family companies are often included as beneficiaries to minimise tax.
The Labor party’s current focus on trusts is warranted because overwhelmingly, trusts are used to minimise tax, avoid paying creditors and to avoid the fair division of property after a relationship breakdown.
Due to a lack of data, it’s hard to estimate the amount of lost tax revenue from the current regime. However, on conservative assumptions, I estimate we are easily losing A$2 billion per year in income tax through discretionary trusts. 
If a discretionary trust elects to be a “family trust” under the tax law, it can also access a number of other concessional tax rules. These tax concessions aren’t available to any other entities or taxpayers.
How trusts are used
There are a few other ways discretionary trusts are used. They are also used to frustrate creditors, people who are owed money by the beneficiaries of trusts. 
Someone who is owed money by a beneficiary of a trust can’t go to the trust to settle their debt. This is the case even if the beneficiary has received money from the trust in the past and is likely to receive money in the future, after release from bankruptcy (having not paid their debts).
Unsecured creditors, such as suppliers of businesses dealing with a trustee, also cannot settle their debts with a trust if the trustee doesn’t have sufficient assets. Often the trustee will be a company paid to manage the trust, with only a few dollars of share capital. 
According to data used in my research from the Australian Taxation Office, a lot of family wealth (aside from the family home) is held in discretionary trusts. On relationship breakdown, one spouse will often argue that because the assets are in a discretionary trust, they are not owned by anyone, and therefore won’t be divided with the rest of the couples’ assets.
The Family Court has wide powers to decide what can be divided, and generally the court included assets in the discretionary trust to be divided, where a spouse is a trustee, or has the means to appoint or remove a trustee. However, if the spouse is “removed” or “distanced” from the discretionary trust, it becomes harder and harder for the court to include these assets to be divided.
Discretionary trusts are also used in succession planning. Where a person has property to give away and wants the flexibility to do it over time. It also allows the payments to change with needs and circumstances. For example, if a trust beneficiary landed a high-paying job, they could be given less. Conversely, they could be given more if they lost their job.
There may be a case for these arrangements when a person has died. By putting assets into a discretionary trust, a deceased person may be able to “tie up assets” for around 80 years (the maximum period permitted). But this sort of flexibility is available to anyone when they are alive; there is no need for a discretionary trust. 
So can we just get rid of trusts? Legally, it could be done. But outright abolition is not practically achievable, at least in the short-term.
What to do with trusts
There are broadly two options for tax reform when it comes to trusts. These measures can be implemented while leaving users of discretionary trusts free to enjoy all other legitimate features and benefits.
The first option, which many still seem to favour, is to impose the company taxation system on the discretionary trust (that is, tax them as companies). Due to the presence of the <a href="https://www.ato.gov.au/Business/Imputation/In-detail/Utilising-franking-tax-offsets-and-effect-on-losses---corporate-tax-entities/">refundable franking credit tax offset rule</a>, taxing trusts as companies would not really address the central issue of tax minimisation. 
Trusts would still be able to manipulate allocations of money across low-rate beneficiaries and change allocations from year-to-year to avoid tax. However, it would remove the availability of the capital gains tax discount to discretionary trusts.
Another option is to use an attribution approach to trusts, just as the social security system does and as family law effectively does. Under the attribution model, the person who contributed the assets to the discretionary trust and/or the person who controls the assets in the trust are deemed to own the income and the assets. This would largely reflect general law entitlements of each spouse and very often reflect the economic contributions to building up those assets.
Of course, this model has challenges in design and in enforcement. However, given the complexity of rules in Australia’s income tax and the enforcement issues that confront the Australian Taxation Office in numerous areas, any difficulties with the attribution model are easily overcome. And of course, it’s already part of the social security regime for assets and income tests.
<a href="https://theconversation.com/profiles/dale-boccabella-15706" target="_blank">Dale Boccabella</a> is Associate Professor of Taxation Law, UNSW and author for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
</body></html>

jchancellor-FAypfDUnLy

Family trusts often cause more harm than good

<html><body>
The budget announcement of taxing vacant homes as a measure to free up housing stock is still unclear, with the tax office unable to provide any guidelines on how it will implement it. 
Treasurer Scott Morrison said during the budget presentation that the measure “is intended to encourage foreign owners of residential property to make their properties available for rent where they are not used as a residence and so increase the number of dwellings available for Australians to live in”.
The federal government is only expecting to tax 1,000 vacant foreign-owned properties in 2019-20 – for a total $5 million in revenue.
The new charge is expected to bring in $16.3 million over the forward estimates being monitored by the Australian Tax Office, but with few details on its implementation.
There is a  Victorian tax set for introduction too, which will be self-reporting. 
The vacancy tax in Melbourne will be at 1 percent, multiplied by the capital improved value of the taxable property. 
The new tax is expected to raise about $80 million over four years.
Victoria say it will rely on self reporting with owners will be expected to inform the State Revenue Office when their property becomes vacant.
Owners of vacant homes will have to pay least $5000 in the Federal Government tax.
But the ATO said it couldn't yet provide any details on how it will determine whether dwellings are left unoccupied and out of the rental market for six months or more out of every year, as this would be contained in legislation that had not yet passed through parliament, The Australian Financial Review reported.
"Unfortunately we are unable to answer your question as the government announcement is yet to be legislated," an ATO spokeswoman was quoted as saying by the AFR.
A federal treasury spokeswoman was cited by the AFR as saying the department was working on the rules.
"The government is developing legislation as a matter of priority and anticipates that it will be introduced into Parliament later this year," she said.
"The measure is not about raising revenue, but ensuring vacant properties are released into the market both now and into the future."
Housing think tank Prosper Australia says electricity meters could be used to track occupancy, but it would be costly to administer.
According to a study by Prosper Australia last year, more than 82,700 residential properties — or 4.8 percent of Melbourne’s housing stock — sit empty.
But if the new regimes are pursued, foreign owners of vacant properties in Victoria, at least, can expect to take a double hit from both state and federal vacancy taxes.
</body></html>

jonathanchancellor-7SQnKwU6yx

No clarity from ATO yet on how vacant homes tax will be imposed

<html><body>
<img src="https://counter.theconversation.edu.au/content/77308/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Australians are concerned about housing affordability, so much so that 45.4 percent say they would be willing to see the value of their home stop growing to improve the situation, only 31.8 percent of those polled wouldn’t. 
An ANU poll shows 51.7 percent of Australians are also in favour of removing tax concessions like negative gearing.
The poll surveyed 2,513 people (representative of the population) and found 63.6 percent were willing to see an increase in supply of public housing. Only 32.3 percent are opposed to relaxing planning restrictions. 
With these numbers in mind, it is perhaps surprising that state and federal governments have done so little of any substance in housing policy for decades, if anything they’ve contributed to the problem rather than improved the situation.
Potential policy changes that many believe will improve housing affordability, including removing or reducing tax incentives such as the capital gains tax discount or removing supply impediments, have all been considered too politically difficult by the current government.
The government has justified this by playing to the fear that the value of people’s home may decline or that more liberal planning arrangements may mean that new buildings may spoil the look and feel of local neighbourhoods. 
The latest ANUpoll shows Australians are very concerned that future generations may be locked out of home ownership. Three quarters believe home ownership is part of the Australian way of life.
In terms of their own investments we found that nearly 68 percent of homeowners cite emotional security, stability and belonging as a reason for becoming a homeowner. In terms of security factors, 51 percent cite financial security, 42 percent refer to “renting is dead money” and 41 percent cite security of tenure and being able to “bang nails in the wall”. 
Of those families who have an investment property (17 percent in this poll) the primary motivation for the investment was a “secure place to store money” (27.4 percent) closely followed by rental income (24.3 percent). Only 11.9 percent cited negative gearing as the primary motivator and 13.7 percent were motivated primarily by the capital gains discount. 
Housing remains easily the most popular investment vehicle, with 30 percent saying their preferred investment for spare cash would be an investment property, followed by 18.5 percent preferring to upgrade their own home. Only 12.6 percent preferred shares as an investment. 
In spite of recent talk of a housing bubble the general population is not particularly concerned with immediate price drops, with 85 percent expecting house prices to rise over the coming five years. Only 5.4 percent expect prices to fall and just 1.7 percent expect prices to decrease a lot.
If interest rates were to increase by 2 percentage points, 6.4 percent of mortgage holders expected to be in “a lot” of financial difficulty and 16.7 percent in “quite a bit”. Only 27.9 percent would be in no difficulty. While financial difficulty does not mean default, in mortgage markets it may not take a large share of loans to default to cause financial problems for an economy.
As pointed out earlier negative gearing was the least cited reason for property investment which suggests removing the incentive would at least not make a dramatic difference to the level of housing investment in Australia.
The ANUpoll shows that the public are concerned about housing affordability and where policy is directed at improving affordability they are likely to be supportive. The policy options, be they demand side - reducing tax incentives, or supply side - building more dwellings and/or relaxing planning restrictions, are available, but greater political nerve may be required to undertake such options.
Ben Phillips is associate professor, Centre for Social Research and Methods (CSRM), Australian National University and author for The Conversation.
He can be contacted <a href="https://theconversation.com/profiles/ben-phillips-98866" target="_blank">here</a>.
</body></html>

Government out of touch on housing policies ahead of budget: poll

<html><body>
<img src="https://counter.theconversation.edu.au/content/74545/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Is “value capture” a wonderful untapped opportunity to fulfil all our infrastructure dreams? Or is it just a new way to sting the taxpayer? Our new report casts a cold, hard gaze over value capture, and finds that it’s a good tax in theory, but will prove very hard to put into practice.
Value capture is the name given to a policy whereby governments capture some of the increased value of land that results from building a new piece of infrastructure. Typically, the money the government “captures” is used to help fund the project.
At first glance, value capture seems marvellously fair, because it applies only to those who benefit from the particular project. So the people of western Sydney do not help fund a new railway station on the North Shore. But look a little closer: it also means that affluent inner-city residents don’t help fund a better railway station in Melbourne’s outer northern suburbs.
Federal ministers from the prime minister down are enthusiastic about value capture and are pushing the states to embrace it. Only last week, Urban Infrastructure Minister Paul Fletcher reiterated that the Commonwealth does not want to be “just an ATM” for the states. But if the federal ministers face up to some home truths, they may find value capture less to their liking.
Value capture is a tax
Home Truth No. 1 is that a value-capture scheme is a tax. That’s how it raises revenue. Politicians tend to shun the “T word”. They prefer to present value capture as an innovative financing mechanism. Sorry, it’s a tax.
Some advocates point to Hong Kong, where a private company builds and operates the rail lines, in return for cheap access to development rights around the new stations – a non-cash subsidy. Yes, integrating new infrastructure with rezoning and other planning changes is a great idea. But a similar model in Australia would have to be much smaller in scale.
That’s because in Hong Kong the government owns all the land. In addition, the city is dramatically denser than Australian cities: more than 7 million people live in a built-up area of around 285 square kilometres, compared with Sydney’s population of about 5 million in around 2,000 square kilometres. In a very dense city, good access to mass transit is highly valued.
Others in the value-capture camp point to tax increment financing (TIF) schemes. These have been used in the US with mixed success.
TIF schemes don’t involve a new tax, or indeed a funding source of any kind. Instead, they are financing schemes that earmark an expected increase in future revenue from existing taxes, such as land taxes, which can be attributed to a new piece of infrastructure. This increase is then used to repay special-purpose bonds.
But TIF schemes are of little value in the Australian context, since Australian governments have strong credit ratings and can borrow at extremely low rates of interest – more cheaply than private sector financiers can. Not only this, but TIF schemes generally do not offload project risk. They may instead come with a hidden government guarantee.
Family home would be captured
Which brings us to Home Truth No. 2: to raise a reasonable amount, a value-capture tax would need to include the family home. Owner-occupied housing accounts for around 65 percent of total land values in Australia, and increases in its value are taxed very lightly (see the chart below).
<a href="https://www.propertyobserver.com.au/images/2017/03/20/image-20170316-20491-1fsjall.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/20/image-20170316-20491-1fsjall.png" alt="">
To minimise the distortions value capture could have on the economy, it should be charged on unimproved land value, as a flat proportion of the land-value uplift attributable to the new infrastructure, with no exemptions.
A tricky question of who’s in and who’s out
Home Truth No. 3 is that many taxpayers are likely to feel aggrieved. Property prices go up – and down – for many reasons.
Drawing a boundary around a new piece of infrastructure to distinguish between those who must pay the new tax and those too far away to benefit is bound to involve rough justice.
Also, it won’t be easy for governments to convince people that their new tax bill still leaves them better off. Homeowners get the benefit of the new project on paper, but have to pay the tax bill in cash. Is this sounding like a political nightmare yet?
A way to reduce the political heat
There is, however, a way to implement value capture that could take a bit of the political heat out of individual decisions. Governments could pass general legislation that applies value capture to every transport infrastructure project with certain characteristics:
an identifiable beneficiary catchment
a project that’s expected to makes an area significantly more accessible
the amount of revenue to be raised far outweighs the cost of administering the scheme. 
So, for example, value capture might apply to all urban passenger rail projects costing over A$50 million. The tax might then be levied on all properties within 800 metres (i.e. walking distance) of a new station.
Once such legislation is in place, each value-capture tax may be slightly less politically fraught. This approach will minimise the opportunities for rent-seeking or corruption that arise from designing bespoke schemes for every individual project.
Broad-based land tax is better still
A better answer still could be a broad-based land tax. Such a tax is highly efficient, because land is an immobile tax base (see the chart below).
<a href="https://www.propertyobserver.com.au/images/2017/03/20/image-20170316-20523-5e9xex.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/20/image-20170316-20523-5e9xex.png" alt="">
While it would not zero in on the beneficiaries of new infrastructure, a land tax would capture the effects of all infrastructure, old and new, as these translated into land values, making it scrupulously fair. A broad-based land tax would also be simpler to administer than a value-capture tax. That’s because there would be no requirement to police the geographic boundary of the catchment area.
So a broad-based land tax has some distinct advantages over a value-capture tax.
Some will say our conclusions are pessimistic, that a little more creativity could devise a way to design value capture so it painlessly funds public infrastructure. To which we would say: there’s no magic pudding when it comes to public money – the only sources of funding for public infrastructure are user charges or a tax. Value capture may involve taxing beneficiaries more than the general taxpayer, but it’s not a bucket of free money.
Yes, if value capture is done the right way, as a tax that embraces the principles of equity, efficiency and simplicity, it could make a positive contribution to infrastructure funding in Australia. But the truth is, there is nothing easy about capturing value.
 
Marion Terrill is<a href="https://theconversation.com/profiles/marion-terrill-169480"> </a>Transport Program Director, Grattan Institute and can be contacted <a href="https://theconversation.com/profiles/marion-terrill-169480" target="_blank">here</a>.
Owain Emslie is<a href="https://theconversation.com/profiles/owain-emslie-250445"> </a>associate, Grattan Institute and can be contacted <a href="https://theconversation.com/profiles/owain-emslie-250445" target="_blank">here</a>.
Both are authors for The Conversation.
 
</body></html>

Value capture: a good idea to fund infrastructure but not easy in practice

<html><body>
GUEST OBSERVER
You may have heard that Victoria announced a new tax this month that will cost landlords $20 million a year, and that's just in the beginning.
Many observers believe that investors will be squeezed over time by increasing tax rates that raise the state government's take.
How does this new tax affect you as a property investor? Let's look at it closely.
First, here are the details of the tax:
• It will be charged every calendar year from January 1, 2018, together with your land tax.
• It will be imposed on houses and apartments in the inner and middle suburbs of Melbourne that lie vacant for more than six months per year.
• It will cost you 1 percent of your property’s capital improved value. For example, if the capital improved value is $500,000, you will have to pay $5,000 in tax every year.
• There are exemptions: holiday homes (if your principal place of residence is in Australia), a city unit for work purposes, properties in deceased estates and homes subject to legitimate temporary absences (e.g. medical care, overseas appointments).
• You can avoid this tax by selling, moving into or renting out your vacant Melbourne property.
Is Victoria a safe place to invest?
The biggest question raised by this new tax, which is just the latest strand of red tape strewn across Melbourne’s CBD in recent years, is whether the state is any longer a safe place for property investors to put their money.
Property investment is almost always a years-long commitment to a location. Time can expose you to many unforeseen risks, so the smart investor tries to avoid at least those that seem obvious.
And it does seem obvious that Victoria's leaders will impose more taxes on property investors in the years to come. The Australian Financial Review reckons that the latest move is "just the start of a push by the state to collect more revenue from property owners."
True, most of these fees and taxes have targeted foreign investors, but this latest levy makes no distinction between offshore and local absentee owners. 
Who’s Next?
Pickpockets operating on a crowded street never limit themselves to just one wallet, but pick as many as they can. Just so, governments pursuing new revenue never limit themselves to taxing —as in the case of foreign buyers— just the smallest share of those within their reach. Not when there is a far richer wallet to be picked. Australian property investors: that wallet belongs to you.
What's most puzzling about this behaviour is that property investors have contributed much to Victoria. You have added hundreds of millions of dollars and tens of thousands of jobs to the local economy. By purchasing units off the plan, you have made possible the construction of development projects that otherwise would have remained nothing more than architectural drawings. All this building has provided tens of thousands of new homes for Victorian residents.
Worst of all is the government's shallow claim that housing affordability is its real goal. Victoria’s recent development boom was made possible, in large part, by property investors. The most powerful thing the state government could do for first home buyers would be to encourage the very property investors who make new construction possible.
The new residences that investors create give homes to renters and provide opportunities for new buyers to grasp the property ladder and climb onto the first rung. 
Unfortunately, the state is taking exactly the opposite tack.
Real estate agents can profit
While investors may be dismayed, real estate agents can profit from the new vacant property tax. It represents a golden ticket for real estate agents who, due to their deep local knowledge, may be aware of which residences are vacant. I'm sure smart agents are already calling and emailing owners of vacant property to help them to sell or lease up the homes for them.
Perhaps most puzzling of all is that Victorian Treasurer Tim Pallas says the State plans to use utility usage to determine which homes are left empty. At Bunnings right now you can buy timers that give you precise control of both water and electrical usage in your property. Is the State so naive as to impose a tax that anyone can foil by installing a couple of $20 electronics? Installing a timer on one faucet and another on a single outlet seems likely to ensure an owner’s utility usage falls within the minimum range.
Gavin Norris is head of Australia for Juwai.com, the No. 1 Chinese international property portal and can be contacted <a href="https://list.juwai.com" target="_blank">here</a>.
</body></html>

What Victoria’s new vacant property tax means to you: Juwai's Gavin Norris 

<html><body>
GUEST OBSERVER
The Howard government, when flush with revenue, made a bad tax decisions which continue to haunt current policy makers. 
It removed the tax on the retirement phase of superannuation, this has been partly resolved by current government’s recent changes. But the Howard government also replaced the full taxation of real capital gains with concessional treatment of capital gains (only 50% of gains taxed). This remains as a tax avoidance loophole which both parties acknowledge but are reluctant to act upon.
The reason is straightforward. Assets put into superannuation in the accumulation phase and held until the retirement phase, can then be sold with no, or minimal, capital gains tax payable. This a major incentive to put assets into super and hold them until the retirement phase.
Without further changes to superannuation taxation, this is simply going to worsen the social problem of the well-off adopting tax minimisation strategies by piling as many assets into super as possible. Remember, it will still be possible to contribute up to A$100,000 per annum as non-concessional contributions.
Consequently, the well-off could easily build up a pool of assets of several million dollars or more, which when sold in retirement will still get very, very, favourable capital gains tax treatment under super.
If superannuation assets in retirement are under the A$1.6 million cap, no tax will be payable on capital gains from sales of assets. If assets are above the cap, the tax rate applied to capital gains is 10%.
For example, an asset costing $100,000 and held for 15 years, increasing in price at an average of 7% per annum would be sold for $276,000. If in super, tax payable would be $17,600. If outside of super, on the top marginal tax rate (including levies) of 49%, the tax payable would be $43,096.
If the concession on capital gains tax was reduced (without addressing the concessionary rate in super), the incentive would be even bigger. For example, if the concession was reduced to 25%, tax payable on the capital gain outside of super would be $64,644, an even larger gap to the tax payable in super of $17,600.
Putting $100,000 per annum into super for 15 years with an average 7% capital gain per annum generates a portfolio worth $2.7 million. The capital gains tax savings on this being in super, rather than outside, are more than $1 million!
So, what are the consequences if a brave government elects to reduce the concession applied to capital gains tax? If they make no changes to super tax arrangements there are at least two likely consequences.
First, there is increased incentive for individuals to set up self managed super funds to exploit these tax arbitrage or minimisation loopholes.
Second, despite taxation of earnings on retirement income balances over the A$1.6 million cap, maximising non-concessional contributions into self managed super funds will remain attractive, to take advantage of the difference in capital gains tax rates on assets inside versus outside super – to the detriment of future government budgets.
The consequences for self managed super funds incentives to borrow (via non-recourse arrangements involving trusts) to purchase assets such as property are unclear. As described on one adviser’s website:
Such borrowing will enable trustees to acquire assets over and above the assets that can be obtained from contributions. The caps on contributions can therefore be “overcome” by such borrowings.
However, it is doubtful that there are tax arbitrage benefits from using leverage to purchase assets via super (because higher marginal tax rates mean higher tax deductions for interest on borrowings outside of super).
For reasons of social equity, any general changes to the capital gains tax rate will also need to address capital gains tax within super. Admittedly there is already a lower concession in the case of super (two-thirds of gains are taxed versus one-half).
But that means taxing capital gains in super at only a 10% rate, leaving strong incentives to thwart higher capital gains tax by locating assets within super. Failing to reduce the capital gains tax concession in super would be likely to undo a substantial part of the effectiveness of any general changes the government has already made.
Kevin Davis is research director of Australian Centre for Financial Studies and Professor of Finance at Melbourne and Monash Universities, Australian Centre for Financial Studies. He is an author for The Conversation and can be contacted <a href="https://theconversation.com/profiles/kevin-davis-3497" target="_blank">here</a>.
 
</body></html>

Despite superannuation changes, one tax loophole remains: Kevin Davis

<html><body>
The Turnbull government is planning to cut capital gains tax concessions for property investors, according to a report in The Australian Financial Review.
It says the policy backflip will be unveiled in the May budget.
"It is understood the policy being worked on within government would be confined to property investment, and not apply to all investments such as shares, as Labor's plan would," reporter Phillip Coorey wrote.
The options being worked on include following Labor in halving the 50 percent discount on capital gains tax to 25 percent, or reducing it by another amount. The other is adopting a phased model in which the discount would increase the longer the property was held. A property would have to be held for several years before the investor was eligible for the full 50 percent discount.
The suggestion has been wrapped up as seize the initiative on housing affordability but will provide revenue to help replace soon-to-be dumped budget cuts.
"Neither would the Coalition policy target negative gearing, as Labor is doing."
But Malcolm Turnbull this morning said the Government did not support the Labor Party’s plans to increase capital gains tax or negative gearing.
“We do not support the Labor Party’s plans to increase capital gains tax or indeed their plans to outlaw negative gearing.
"Our policy is… focused on encouraging investment and employment and the economic growth and opportunity that Australians need”.
“The only party that is an advocate for higher taxes is the Labor Party… We are a party of lower taxes, supporting investment, supporting employment, and bringing the Budget back into balance”.
</body></html>

Property investor capital gains tax mooted to rise in 2017 Federal Budget

<html><body>
New tax rules in place since July 2016 now apply to vendors disposing of certain taxable Australian property under contracts.
Conveyancers may need to register with the Tax Practitioners Board, when assisting clients to meet new requirements under the foreign resident capital gains tax withholding measures. Ian Taylor, chair of the Tax Practitioners Board, said depending on whether a conveyancer’s client is the vendor or purchaser, foreign resident capital gains withholding forms may need to be completed and submitted to the ATO which include clearance certificate, rate variation application and the purchaser payment notification form. 
"The TPB considers there are sections of each of these forms that involve the provision of a tax agent service. 
"It is also recognised that conveyancers, who perform certain services relating to the purchaser payment form, are exempted from being registered with the TPB as a tax agent until 31 December 2017.   "Before assisting clients to meet the requirements of the foreign resident capital gains withholding regime, all conveyancers who are not registered with the TPB as tax agents, need to understand what they can or cannot do under the TASA.   "If conveyancers complete and submit these forms to the ATO on behalf of a client for a fee or reward, they may need to be registered with the TPB, either immediately or in the future"   For further information about whether or not conveyancers need to be registered with the TPB <a href="https://tpb.us4.list-manage.com/track/click?u=f1bfb3d6593e3b7312cde4bc0&amp;id=9c07a3e754&amp;e=c8397a77b6" target="_blank">click here</a>.
</body></html>

Property 101: Conveyancing and the TASA

<html><body>
Foreign buyers of property in Vancouver now have to pay a 15 percent transaction tax.
British Columbia legislators passed the new law which means new tax means non-Canadian residents buying a $2 million home will have to pay an additional $300,000 in tax.
"While investment from outside Canada is only one factor driving price increases, it represents an additional source of pressure," British Columbia Finance Minister Michael de Jong said in a statement.
"This additional tax on foreign purchases will help manage foreign demand while new homes are built to meet local needs.
Meanwhile the City of Vancouver has identified the need for a vacancy tax in order to meet rental supply issues.
The new foreign buyer tax could face a court challenge as it may be in violation of the Canada-China Bilateral Investment Treaty.
</body></html>

Taxation

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Taxation

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News