First National Press Releases

Media Release - 20 July 2017

NEW FINANCIAL YEAR - YOUR PROPERTY GOALS

Whether you're looking to buy your first home, upsize, sell or invest, there are plenty of changes you can make to reach your property goals this new financial year according to First National Real Estate Lewis Prior principal, Brett Lewis.

‘At First National Real Estate, we're encouraging all of our customers to make (and keep) a property-related goal’ said Brett Lewis.
 
‘Whether you want to buy your first home or take advantage of new Government incentives to downsize, there are steps you can take to make your property dreams reality this year’.
 
Here are First National’s three tips for the financial year
 
1. Prospective buyers - stash away a deposit

 Not having the deposit is the number one roadblock for property buyers, as outlined in the recent Housing Affordability Report by CoreLogic. Although you aren't required to have a 20 per cent deposit to buy a home, it certainly helps to have a substantial deposit before taking out your first mortgage because there will be no need for expensive, ongoing, mortgage insurance.
 
Whether you want to buy soon or in the future, non-property owners who are looking to get on the ladder should start saving towards a deposit in 2017. This goal may impact lifestyle choices but there are simple ways to save, including:
 
  • Your monthly budget should reflect income and expenses
  • Reduce ‘lifestyle’ choices by taking lunch to work
  • Eliminating unnecessary spending
  • Ensure your bank accounts maximise benefits for you
  • Take advantage of the Federal Government’s First Home Super Saver Scheme
 
2. Homeowners - purchase an investment property
 
If you already own a home, this could be the year to purchase an investment property. Property investors enjoy the benefits of:
 
  • Reasonably secure returns
  • Owning an asset with a potential to grow in value
  • Leveraging their existing property equity to facilitate an investment loan
  • A reliable income from rent payments
 
‘You don't necessarily need to be a property owner to become an investor’ said Brett Lewis.
 
‘“Rentvesting” - the practice of renting out your main residence in one place and purchasing an investment property in a more affordable area was also identified as an emerging trend in the CoreLogic Report’.
 
3. Sellers - make a smart renovation

 
If you are not planning to sell your home in 2017, it is the perfect time to make renovations that will increase your home's value. A fresh coat of paint or new light fixtures will add value to a home but be careful not to over-capitalise.  The main game is to prepare your home now in preparation to sell.
 
Work with a real estate agent in order to understand what buyers are looking for in your local market. First National Real Estate is Australia’s largest independent network of real estate agents, with nearly 400 offices throughout Australia, New Zealand and Vanuatu.


Media Release - 6 June 2017

COULD LOCAL BUYERS GET CAUGHT PAYING A FOREIGN INVESTOR'S TAX BILL?

Government initiatives aimed at restricting foreign ownership may give the impression of helping affordability for local buyers, however there are potentially hidden risks, according to First National Real Estate Lewis Prior principal, Brett Lewis.
 
Previously, legislation required buyers of properties worth more than $2 million to withhold 10 per cent of the purchase price and send it to the Australian Tax Office (ATO), if the vendor was a foreign resident for tax purposes. Now, any property worth $750,000 or more is affected and the Withholding Tax will increase to 12.5 per cent from 1 July 2017. However, the previous threshold and rate will apply for any contracts that are entered into before 1 July 2017, even if they are not due to settle until after 1 July 2017.
 
‘Naturally we support the intent of the changes but it is essential that lawyers and conveyancers proactively ensure their clients abide by the new laws’ said Brett Lewis.
 
‘If buyers don’t retain the 12.5 per cent withholding tax, they could find themselves liable for a penalty from 1 July, which could be the full 12.5 per cent of the purchase price as well as interest. Nobody would want that.’
 
To avoid potential settlement delays and complications, owners who are selling properties worth more than $750,000 should obtain a clearance certificate from the ATO to prove they’re an Australian resident for tax purposes. However, the lift in the number of properties affected by the changes could increase the length of time it takes to obtain a certificate.
 
‘Now that many more properties fall into the Government’s tax net, there’s great concern about the potential for extended delays acquiring clearance certificates, which used to take anywhere from a few days to four weeks’ said Brett Lewis.
 
‘Vendors would be well advised to apply for the certificate the moment they appoint a conveyancer and real estate agent. This will assure that the moment a sale price is agreed with a buyer, there will be no impediment to completing a contract of sale and the buyer will have confidence they are not placed at risk.’
 
Other significant changes affecting property brought down by the Budget are:

  • Foreign investors will no longer be able to access the Capital Gains Tax exemption (CGT) on their main residence in Australia, with the new rule commencing from budget night but grandfathered on existing properties until June 30, 2019.
  • Developers will no longer be able to sell more than 50 per cent of apartments off the plan to foreign investors (when the development has more than 50 units)
  • Foreign residential property investors who leave properties unoccupied, or not genuinely available on the rental market, for at least six months per annum, will face an annual levy of at least $5,000
  • Any failed off the plan purchases by foreigners will now once again be considered new, thereby overcoming previous limitations

 ‘The threshold for foreign resident capital gains tax withholding will soon stand at a level that is impractically low’ said Brett Lewis.
 
‘Seventy six per cent of foreign investors buy in New South Wales or Victoria and spend $1.6 million on average. The new threshold will unnecessarily expose a large number of property transactions to excessive bureaucracy.’

 

Media Release - 17 March 2017

HOUSING BUBBLE SPECULATION UNWARRANTED

The Principal of First National Real Estate Lewis Prior, Brett Lewis says local community fears of an Australian housing bubble are the result of media speculation, based on overseas analysis, that fails to account for Australia’s unique market circumstances.
 
‘The Organisation for Economic Cooperation & Development’s recent claim that Australian house prices may represent a threat to the economy is similar to much of the foreign commentary we’ve heard before; it fails to fully appreciate the nature of our economy, how Australians invest, and where they want to live’ said Brett Lewis.
 
‘Australia is the only country in the world where nearly 40 per cent of its population wants to live in two capital cities that together comprise less than 0.3 per cent of the country’s landmass. Historic low interest rates have combined with overall positive economic conditions, and a national preference for housing investment over shares, to drive up house prices in Sydney and Melbourne. However, this is not the case across regional Australia and in Perth where house prices are still falling.’
 
First National Real Estate is of the view that unless there is a sharp increase in interest rates or a sudden rise in unemployment, there is limited potential for a housing prices crash.
 
‘Both scenarios are unlikely’ said Brett Lewis.
 
‘The Reserve Bank of Australia’s (RBA) preference would in fact be for further cuts to official interest rates if that didn’t increase the risk of further inflating house prices. While rates will eventually have to rise, that’s clearly not the RBA’s choice while inflation remains below target and the country is not at full employment. And, with 1.1 per cent economic growth announced last week, a significant increase in unemployment is also unlikely.
 
‘In reality, Australia has no oversupply of property, data shows new construction approvals are trending downwards, and the country’s lending standards continue to be strong, which contrasts sharply with the conditions that led to housing bubbles bursting in many countries following the Global Financial Crisis.’
 

Media Release - 22 February 2017

4 REASONS INVESTORS SHOULD PRIORITISE DEPRECIATION

Investors should always look for ways to reduce the costs of owning an investment property, and depreciation deductions should be at the top of their list says First National Real Estate Lewis Prior principal, Brett Lewis.
 
‘Around 80 per cent of investors don’t maximise the deductions available from their investment property, so they should add requesting a tax depreciation schedule to their list of 2017 resolutions’.
 
There are four good reasons why:
 
1. Investors claim an average of $5,000 to $10,000 in the first year
 
Property depreciation is a non-cash deduction that can be claimed due to the gradual wear and tear of both the building structure and the plant and equipment items contained within the property. On average, investors can claim between $5,000 and $10,000 in deductions within the first financial year. By claiming property depreciation, investors are reducing their taxable income and therefore may benefit by receiving more in their annual tax return or avoiding having to pay additional taxes.
 
2. Every property investor can benefit from a depreciation schedule
 
Some investors think that because their investment property is old, they won’t benefit from claiming depreciation. This is untrue. Both new and old properties will attract depreciation deductions for their owners. Depreciation deductions can be claimed for all types of investment properties including residential, commercial, industrial, retail, manufacturing, hotel and tourism accommodation.
 
3. Adjust the previous two years tax returns
 
If you haven’t been claiming depreciation for your investment property, the previous two years tax returns can be adjusted and claimed back.
 
4. The fee is 100 per cent deductible
 
Although there is a cost involved in arranging a depreciation schedule, the fee is 100 per cent deductible. This is why investors should arrange their schedule in the lead up to end of financial year rather than wait until tax time.
 
‘Investors who own or who are planning to buy an investment property should find out more about depreciation deductions available for their investment property by asking their First National Real Estate property manager now’ said Brett Lewis.