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National News Australia

Builders Respond to Latest Rise In Rates

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NSW Northern Rivers Breaking News

Builders Respond to Latest Rise In Rates

Responding to the rise in interest rates Master Builders Australia’s CEO Denita Wawn said “The Reserve Bank’s decision to further increase interest rates is more evidence of the need for monetary policy to return to more normalised settings to combat inflation.”

“However, while acknowledging the need to tackle the dire effects of inflation, we are concerned that a continuing regime of steep rate rises risks turning the economic dial too far in the opposition direction and stalling economic growth needed to for the continuing recovery from COVID,” she said.

“Time should be given to observe the impact of the monetary policy changes in the economy,” Denita Wawn said.

“Our industry is disproportionately affected by interest rises and a hard economic landingwould put at risk the viability of many building and construction businesses who have managed to come through the pandemic but whose resilience has been eroded by severe supply chain pressures. Many now lack the resilience to withstand more sharp economicshocks,” she said.

“The building and construction industry has shouldered much of the responsibility for underpinning the economic recovery. Suppressing construction activity would counteract the efforts of governments and the expenditure of billions in taxpayer’s funds to shepherd the economy through the worst of the pandemic and protect growth,” Denita Wawn said.

“Today’s decision reinforces the need for the Federal Government to ensure that its fiscal
policies, indeed all economic levers, must be tested against their ability to drive down inflation
and increase productivity,” Denita Wawn said.

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National News Australia

CEREMONY FOR NEW TECHNOLOGY TO AUSTRALIA

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CEREMONY FOR NEW TECHNOLOGY TO AUSTRALIA

The SX5 Group will host a special ceremony on Thursday 4 August to welcome a new dozer machine to the country – a first of its kind to be used in Australia. The Cat D10T2 Dozer will be used to rehabilitate mine sites on Aboriginal land.

The ceremony includes important cultural and spiritual significance. Elders from Noongar and Yinhawangka country will welcome all onto their land with a Welcome to Country, smoking ceremony and blessing of the machine.

SX5 is an Aboriginal owned contracting company in Eastern Guruma country in the Pilbara of Western Australia. They provide services to companies in the area such as mine site building, manufacture and installation, mobile concrete batch plant operations and site rehabilitation.

Company directors, Ralph and Cherie Keller of SX5 Group, and Kenzie Smith, of the Eastern Gurama group have earned trust with the local Traditional Owners of the Pilbara region of which Kenzie is a respected senior elder.

The new dozer arrived from the USA and had to be factory fitted to take remote and semi-autonomous dozing systems. This will allow SX5 to fulfill their aspirations, allowing them to enter into the semi-autonomous operations by removing the operator from the machine – reducing the risks of this high-risk mining waste dump re-construction.

This factory fitted equipment to this D10T-2 is the first step followed by the equipment and training in remote dozing operations. SX5 hopes to be in remote operations by the first quarter of 2023.

Mine site rehabilitation is a critical aspect of the business for SX5. Ralph Keller explains the importance of from an Aboriginal perspective.

“We’re making things green again, making Country good again. We’re making Country feel better,” said Ralph.

“We’ve always been a great believer in technology,” he says. “What makes us different is SX5 continues to reinvent itself every day. It’s all about technology. That’s how you achieve excellence and how you mitigate risk – and our journey into the autonomous operation world is one example.”

For businesses to work on large scale contracting projects, they need to have the cashflow and performance bond guarantees. IBA’s Chief Executive Officer Kirsty Moore notes the importance of supporting First Nations businesses with opportunities so they can be part of these large projects.

“Putting the regeneration of Country back in the hands of First Nations companies like SX5 is smart business and we’re so glad to support their efforts,” says Kirsty Moore.

“IBA provides leasing opportunities to First Nations businesses so they can acquire critical capital equipment without tying up large amounts of cash that is needed to cover the operating costs of the business.”

“The new equipment has stepped up the production and quality of work that the business has been able to achieve, by using equipment that is purpose built for the task.”

“SX5 is a great example of a First Nations business transforming their opportunities to work with big business – all while restoring Country and being trained in new technology.”

 

 

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National News Australia

BuyersBuyers releases 2022-3 Investor Special Report and top suburb picks

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NSW Northern Rivers Breaking News

BuyersBuyers releases 2022-3 Investor Special Report and top suburb picks

BUYERSBUYERS

Property market moves into downturn phase 

Australia’s housing market will be digesting the prospect of rising interest rates over the next six months, leading to a downturn which will present some opportunities for counter-cyclical investors, according to Pete Wargent, co-founder of Australia’s national marketplace for property buyer’s agents, BuyersBuyers.

Mr Wargent said, “the Australian economy has rebounded far more quickly than anyone could have dared to hope but combining the rebound in demand with supply chain disruptions means that the second half of 2022 will see some of the highest headline inflation prints in approximately three decades”.

“The prospect of the cash rate target potentially rising from close to zero towards 3 per cent by the end of this year will be a serious handbrake on housing market sentiment and activity, not least because so many younger borrowers have never experienced interest rate hikes before, let alone the fastest tightening cycle since 1994”.

“Our best estimate is that the property market downturn will continue for as long as borrowers fear rising mortgage rates, led by Sydney and Melbourne, and this is likely to mean for at least the remainder of 2022”.

“The flip side to this is that the underlying housing market fundamentals are strengthening, with immigration visas set to be fast-tracked to address Australia’s skills shortage, the lowest unemployment rate in 50 years, and incomes now rising” Mr Wargent said.

 Top suburb picks 

BuyersBuyers CEO Doron Peleg said that the national marketplace for buyer’s agents has now released its Investor Special Report for 2022-3, assessing the outlook for each of Australia’s states and territories.

Mr Peleg said, “using our unique housing market analysis tools, we have not only taken a macro view in our Investor Report, but we have also identified some of our favourite suburb picks and investment hotspots.”

“In New South Wales, we expect there to be a sharp rebound in sentiment and activity in early 2023, especially in the sub $1.5 million price brackets, as the long-discussed stamp duty reform kicks in for first homebuyers from January. All of our suburb picks for houses and units therefore reflect this, as well believe the property market recovery will be driven from then entry level price points upwards” Mr Peleg said.

Buyers co-founder Pete Wargent said that the Melbourne market has been significantly disrupted over the past couple of years, with extended lockdowns and COVID restrictions and decline in the population as residents headed interstate to south-east Queensland.

Mr Wargent said, “the relative underperformance of the Melbourne market means that there are some attractive deals on offer for counter-cyclical investors in suburban houses. Some counter-cyclical investors are also now looking at investment grade units in Melbourne, after a decade of underperformance, particularly where they can find assets with a point of scarcity.”

Mr Wargent said, “in south-east Queensland the rental market remains extraordinarily tight following the fastest net interstate migration to the state in Australia’s history, which is still continuing.”

“SEQ has benefited from remote and flexible working arrangements more than any other state, and there are some excellent opportunities to buy houses in Brisbane, Gold Coast, and Sunshine Coast. Price growth has been strong over the past 18 months in Queensland, so investors need to be discerning, buy carefully, negotiate hard, and take a long-term view, perhaps out to the 2032 Brisbane Olympics”.

Mr Wargent said that after a relatively quiet decade a looming rental crisis and relative affordability is driving a tremendous surge in interest from investors looking to buy in Adelaide.

“Two of the key features of the past couple of years have been a ‘race for space,’ and water as a drawcard for property buyers. Some of Adelaide’s beachside suburbs tick both of these boxes, and from relatively attractive price entry points as compared to the larger capital cities.”

Counter-cyclical opportunities 

BuyersBuyers CEO said that the 2022-3 Investor Report will be made available via the company’s website.

Mr Peleg said, “average household sizes declined through the pandemic, and despite a large volume of dwellings under construction, there is going to be tremendous pressure on Australia’s housing stock over the next few years as immigration ramps up again.”

“As population rises towards 350,000 to 400,000 per annum by the end of next year, and as borrowers realised that mortgage rates are still relatively low in absolute and historic terms, we believe that the second half of 2022 will prove to be an attractive period to buy for investors seeking an inflation hedge as rents soar.”

“There is an excellent opportunity to buy with far less competition and to negotiate hard on quality assets for the long term” Mr Peleg said.

“Of course, borrowers need to factor in that mortgage rates will inevitably rise from here, and to take a long-term view of investment property as an asset class.”

ENDS

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National News Australia

Tax time focus on rental property income and deductions

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Tax time focus on rental property income and deductions

AUSTRALIAN TAXATION OFFICE

Income and tax deductions from rental properties is one of the four key areas the Australian Taxation Office (ATO) is focusing on this tax time. It’s an area that’s easy to get wrong, and needs extra care when lodging. The ATO Random Enquiry Program has found that nine out of ten tax returns that reported rental income and deductions contain at least one error, even though most of those property owners were assisted by a registered tax agent.

The ATO is therefore urging rental property owners to ensure they carefully review their records before declaring income or claiming deductions this tax time, and for registered tax agents to ask a few extra questions of their clients.

Assistant Commissioner Tim Loh explained “Registered tax agents can only work with the information they gather from their clients, and we know some clients won’t know everything they need to tell their agent. We don’t expect agents to be Sherlock Holmes, but we do expect them to ask the right questions to ensure their client’s return is right.”

Mr Loh said that rental property owners are urged to ensure they know what income they need to declare and what can be claimed as a deduction.

“We are concerned about mistakes, and in particular, leaving out income or deliberate over-claiming of rental property deductions this year.”

“Getting it right the first time, will ensure you receive the tax refund you are owed, and avoids us knocking on your front door down the track.”

INCLUDE ALL RENTAL INCOME

The ATO receives rental income data from a range of sources including sharing economy platforms, rental bond authorities, property management software providers, and state and territory revenue and land title authorities.

“The amount of data we access grows each year, making it easier and faster for us to spot any rental income that you have charged your tenants, but haven’t declared,” Mr Loh said.

When preparing tax returns, make sure all rental income is included, such as from short-term rental arrangements, renting part of a home, and other rental-related income like insurance payouts and rental bond money retained.

“Income and deductions must be in line with a rental property owner’s ownership interest, which should generally mirror the legal documents.”

GET YOUR EXPENSES RIGHT

Not all expenses are the same – some can be claimed straight away, such as rental management fees, council rates, repairs, interest on loans and insurance premiums. Other expenses such as borrowing expenses and capital works need to be claimed over a number of years. Capital works can include replacing a roof, or a new kitchen renovation. Depreciating assets such as a new dishwasher or new oven costing over $300 are also claimed over their effective life.

Refinancing or redrawing on a rental property loan for private expenses such as holidays or a new car, means that the amount of interest relating to the loan for the private expense can’t be claimed as a deduction.

If income from a rental property in a holiday location is earnt, it needs to be included in tax returns.

“You can claim expenses for the property to the extent that they are incurred for the purpose of producing rental income, not where your family and friends stayed in the property for a mini getaway at mate’s rates, you use it yourself, say at Christmas, or you stopped renting the property out,” Mr Loh said.

“Other circumstances where deductions cannot be claimed include pretending that your property is available for rent when it really isn’t, for example you advertise significantly above a reasonable market rate compared to similar properties or you place unreasonable restrictions on potential tenants.”

“Our 2022 Tax Time Toolkit for Investors also contains a number of fact sheets for landlords, including Top 10 tips to help landlords avoid common tax mistakes. These tips will help you avoid common mistakes and save you time and money.”

SELLING A RENTAL PROPERTY

When selling a rental property, capital gains tax (CGT) needs to be considered and any capital gains or capital losses need to be reported.

When calculating a capital gain or capital loss, it’s important to get the cost base calculation right. Cost base is usually the cost of the property when purchased and any costs associated with acquiring or selling it. These can be things like stamp duty, legal fees, valuations and real estate sales fees. Any capital works claimed as deductions may also need to be subtracted from the cost base.

“If you’ve sold a rental property that was once your home, you may be entitled to partially claim the main residence exemption. You will need to claim this exemption in your tax return when you lodge.” Mr Loh said.

Records of all income and expenses relating to rental properties, including purchase and sale records, must be kept. This ensures all eligible deductions are captured when preparing tax returns and capital gains tax can be calculated correctly when the property is sold.

“It’s also important to note that when selling any property for more than $750,000, vendors / sellers must have a clearance certificate otherwise 12.5% will be withheld.” Mr Loh said.

Clearance certificate applications can take up to 28 days to process so to avoid delays, sellers should apply as early as practical using the online form. Having tax affairs up to date, including all lodgments, helps speed up the assessment of an application and a certificate being issued. The certificates last for 12 months and if selling more than one property in the year, it can be used for multiple sales. Foreign residents are generally not eligible for a clearance certificate but may apply to vary the withholding amount.

Apply for a certificate and find out more at ato.gov.au/FRCGWcertificate

KEEP GOOD RECORDS TO PROVE IT ALL

Records of rental income and expenses should be kept for five years from the date of tax return lodgments or five years after the disposal of an asset, whichever is longer.

“Get your books in order and start keeping records as soon as you make the decision to earn rental income. It makes tax time so much easier for you and your registered tax agent” Mr Loh said.

Adequate records should demonstrate how the expense was incurred for the rental property and the extent they relate to producing rental income. They must include the name of the supplier, amount of the expense, the nature of the goods or services, the date the expense was incurred, and the date of the document.

“We can ask for proof of any claim that you make, so good record keeping is the only way to ensure you can claim everything you are entitled to.”

“Remember, when your return is lodged, you are on the hook for the claims you are making, not the registered tax agent.”

 

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