First National Press Releases

Media Release - 6 June 2017


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


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


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.

Media Release - 23 January 2017


According to First National Real Estate chief executive Ray Ellis, there's no time like the present if you’ve been waiting to buy your first home because no matter what you're trying to buy, values in Australia and New Zealand are just going up and up.
‘The median dwelling value in Australia for the end of 2016 was $615,000 - an increase of 10.9 per cent through the year, according to a CoreLogic RP Data report from January 3. New Zealand didn't perform too differently, with the median house value in December 2016 sitting at $627,905, having grown by 12.5 per cent, as stated by QV’ said Mr Ellis.
‘As year-on-year increases show, home values aren't indicating that they're about to slow down. That's why buying your first home right now is a great idea, because you'll be striking before homes shoot beyond your budget even more’.
When you own a home, you have the opportunity to make capital gains. As the median value increases in both Australia and New Zealand through 2016 show, capital gains in the space of 12 months can help you to build wealth. In fact, if you own a home for 10 years, the value of your purchase might increase by as much as half a million dollars! You'd have to buy in a suburb that is on the verge of growing, and is highly desirable in terms of proximity to amenities, public transport, schools and major centres - but it is possible.
When you rent in a suburb like that, you get all of the advantages of being close to those sorts of places, but your payments won't be earned back when you leave the home. You'll pay rent over the time you live in the home, and then when you leave, you don't reap the rewards.
‘Of course, renting is a great option for people who can't yet afford a home deposit, but buying one can shore up your financial future’ said Mr Ellis.
‘First-home buyers have no experience with the buying process, and many find it a daunting task - going to auctions, making bids, competing with others who potentially have a bigger budget. That's where the friendly team at First National Real Estate can help.
‘We know what you need to do, and we know how to go about it - particularly for first-time buyers. Don't be afraid of making a great decision for your financial future. Get in touch with us today to start your buying journey in 2017 on the right foot’.