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With the New Financial Year around the corner, I thought it would be a good opportunity to review a few of the changes that will come into force, which will impact on property investing.

A few of the Key points are as follows

 

  • Stamp duty exemption for first home owners for properties under $650,000
  • First Home owners can salary sacrifice income in to their superannuation account for a deposit on first property – although capped at $30,000 total.
  • Investors can no longer claim travel expenses to visit investment properties
  • Investors can no longer claim depreciation on existing plant and equipment for residential property.
  • Home owners aged 65+ can make non-concessional contribution into Superannuation up to $300,000 from the sale of their principle place of residence which has been owned for 10yrs+
  • Foreign Investors to pay higher duties for real estate investment across all sectors.
  • Abolishment of the 12- month payment deferral of Stamp Duty for residential off-the-plan purchases for investors. This will still be available for owner occupiers.

 

I think the key factors here will be the policies to help first home owners to save and get into the market. The pre tax saving options are good way to help do this, but I’m not sure if it will be enough to make a big difference. Short term property prices may be adjusted to reflect the stamp duty concessions, but time will tell.

The big impact for investors will be the loss of the depreciation and travel expenses tax deductions. Whilst these will still be available for those who purchased prior to May 9th 2017, purchasers going forward will not be eligible. Depreciation will still be available for homes purchased directly off the builder/developer or for renovation that you as the owner personally undertake. This may help with improving the older housing stock but will certainly dampen the desire for modern second hand property.  Its important to note that commercial property will be exempt from this and you will still be able to claim plant and machinery depreciation. Capital gains rules have remained unchanged at this stage. Ironing out of the details is still to be undertaken, and these measures are yet to be passed in parliament. So watch this space.

 

Happy Investing

Matthew Ward

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Aspect Buyer's Agency is the conduit in property investment between metropolitan and regional centres.