We’ve got Bradley Beer, CEO of BMT Tax Depreciation on the podcast today! Now, some of you might remember Bradley back in Episode 10 where we talked about what is a tax depreciation schedule, how it works and if all property investors should have one done.
For today’s episode, however, we will be relating back to Episode 115 where we chat about the impact of the recently released Federal Budget had on property investors, focusing specifically on the depreciation changes. So here are the topics that they touched on today:
- Exactly what part of the depreciation deductions are affected by the proposed changes?
- Are capital works deductions still available to be claimed at 2.5% for 40 years?
- What is the significance of 7:30 pm AEST on the 9th of May 2017?
- Will they be looking at the contract date or settlement date?
- Do the proposed changes affects tax depreciation schedule that was previously submitted?
- How will this impact investor’s cash flows and is there a difference between new vs old property?
- What is the logic behind the changes on investor’s travel expenses?
If you like this podcast: “Everything You Need To Know About Depreciation Changes – Chat with Bradley Beer, Managing Director of BMT Tax Depreciation”, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://www.thepropertycouch.com.au/topics/
What a week! Apologies for the podcast’s downtown earlier this week and thank you to those of you who wrote in to us. We had a system update and things didn’t quite work out as we wanted them to be. That aside, the 2017 Federal Budget has been released just a couple of days ago. So let’s talk about that.
There were a few proposals relating to the affordability issue and a couple more that aims at the property investors pool. But overall, this was not an overly exciting budget. It was a conservative one. Nonetheless, what impact will if have on property owners and the Australian Property Market in general. Some of the issues that Bryce and Ben discussed in today’s episode are:
- The proposed changes to depreciation deductions for plant and equipment
- Capital Gains Tax exemption for foreign and temporary tax residents
- Investors’ travel expenses claims
- The implementation of First Home Super Saver Scheme and is it a good idea
- The expanded audit on overseas investors
If you would like to understand more about the 2017 Federal Budget, please check out this link.
We’ve also answered a few questions from:
- Joel on the First Home Super Saver Scheme: Hi property couch crew! Since the website is down ill throw my question for the next Q&A here. A good one of the younger generation first home buyers as well as parents. My question relates to the announcement of the first home buyers saving scheme announced in the budget, with the tax break through superannuation. Being someone who has been taught in uni and at home by my parents not to touch my super and add extra payments where possible, is this scheme of accessing it for a house deposit reasonable? I see the tax break being a great idea but opening the idea of people taking there super to buy a house they cant save for rings alarm bells for me. Do i have the correct understanding of it all? Would you recommend another way?
- Leo on property valuation: Hi Ben & Bryce – (and the Stig!), I cannot thank you enough for the endless amount of value that you provide for your listeners. Your content is conversational and easy to understand even for a first-time investor like myself.
I have a suggestion that may also benefit other listeners. I have recently purchased my first investment at 23 years old. It is an existing (3 bed, brick and tile) property and I am in the process of planning a cosmetic renovation. My question is – When refinancing against an existing asset, do all property valuers have a set agenda when valuing your property? Since all valuers will have a different opinion on price, is there a similar set of factors they look at? (i.e Condition of kitchen, bathroom, flooring etc) – going on from this, Is there ways you can make your property more appealing to a valuer in order to gain a higher valuation to leverage onto the next investment? Thanks alot guys – I appreciate your work!
- Derek on bookkeeping for investors: Something that isn’t as widely discussed in the field of real estate is book keeping. You guys mention the need to spend 10 hours or so per year to review each property in a portfolio. Can you dive into greater detail as to what exactly this entails? What sort of information do we need to keep track of and is that done through spreadsheets or specific software?
If you like this episode (What Does The 2017 Federal Budget Mean To The Property Market?), don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts here: http://www.thepropertycouch.com.au/topics/
Can’t believe it has been 11 weeks since our last Q&A! We’ve got quite a line-up of great guests on the show for the past couple of months so for today’s podcast, we will be doing a Q&A instead. Thanks for sending in your question and Bryce and Ben will be answering questions from:
- Bernard on Borderless Investing: I love your show; it’s really given me a different perspective from some other property educators, and it’s one of these differences which gives rise to the following issue. You speak a lot about being a borderless investor and buying quality assets in those locations where the market is in the right stage of the cycle. At the moment, this might mean Brisbane or Hobart or Adelaide or wherever. That’s all good. You are also clear that Sydney and Melbourne are the places which will grow most long term. That’s all good too. If I’m only going to buy 4-5 properties to secure my retirement though, as you advocate in your book, I certainly want to be buying the best long-term performers that I can. I know that done well, I can make good money doing this in smaller markets, but long term I wouldn’t expect to do as well as in the larger metropolises.
If I was buying ten houses, I could carry some weaker assets, but with four it’s obviously vital to get them right. How would you advise someone who already owned a couple of (hopefully!) well-selected properties in Brisbane or Adelaide or wherever who was able to re-invest? Should they hold off, build up a bit of equity and increase their cash buffer before looking at Sydney or Melbourne when the heat has come off there? Or would you suggest buying again and taking the risk that they will never get into the larger markets?
- Alisdair on Loan Redraw Facilities: Can we have a finance expert tax expert come on the podcast? I have a loan where I have paid in extra to the redraw, not offset. I had a strategy to break the loan and refix for a few reasons. The rate is significantly lower. I’m hoping I can claim the break fees as a cost, reducing their effect. Also I want to pay my interest out of the redraw. Can this be done? I feel the break fees are permitted, but the part where I pay interest from the redraw seems an impossible dream due to a mixed purpose loan affect and that the ATO considers it tax avoidance. Any guidance in this matter?
- Lakhwinder on Location Research: I have been listening to your podcasts while driving, thank you so much for such a priceless info you share with us. I recently started my property investment journey bought new house in Western Sydney to get government benefits and bought two investment properties in Loganlea after rezoning, after listening to your podcasts I realised I didn’t apply most of the filters you guys talked about. Both my properties are over the median price of suburb. Both are over 6% yield so not that painful to hold.
First investment property 3bed 2 bath 2 living areas 800msq with pool for $400k. Second 4beds 2baths 800msqr $380k. Westen Sydney property (owner occupier)did great, bought in end of 2014
By June 2016 property revalued at $150k more without landscaping done.I know you guys talked about Brisbane few times but it will be great to listen what you think about logan area and recent rezoning of Loganlea. Questions:- is it ok pay higher price for the properties (houses)that fall within the high-medium density or residential core for a future land bank?
- Clayton on buying off the plan properties: Hi, I would LOVE to get your opinion on buying off the plan properties and what to look out for. This course of action has been put forward by a mortgage broker/real estate developer in Brisbane who will benefit from both the commission on the mortgage and the property itself (they have openly disclosed this). The property will be an investment and NOT my PPR. Love the show and keep up the good work.
If you like this Q&A episode (Borderless Investing, Loan Redraw, Suburb Demographic and more), don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts here: http://www.thepropertycouch.com.au/topics/
Housing Affordability. APRA. Investor’s Lending. Super Property Deposit Debate.
These are headline news for the last few weeks which have been monopolising the business section of most press for some time now. So, we don’t think we can wait any longer either!
Now, what did they chat about today? You would be expecting conversation around the long-term sustainability of the Australian Property Market, an upcoming correction and who will be affected; APRA’s move on investment lending; changes on interest-only loans and how it will affect some borrowers out there; implementing Money SMARTS during these times; relationship between migration and the economy; the Superannuation Property Deposit Debate and more.
Let us forewarn you that this Bonusisode is not as light as our usual episodes. This time, Bryce and Ben discuss some critical housing and political issues and as usual, the commentary in this show is general in nature and is an opinion comment by both of them. It does not take into account the particular investment objectives or financial situation of any potential listeners, and you should always consult a qualified professional advisor before making any investment decisions.
Some of the references made in this podcast are:
If you like this podcast, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://www.thepropertycouch.com.au/topics/.
Bryce recently appeared on our good friend, Kevin Turner’s podcast, Real Estate Talk and we thought it would be a good idea to share it with you guys! If you haven’t check it out yet, tune in to Kevin’s podcast for some great quality property investment news, tips and strategy from Australia’s Top Property Experts and more. In this Bonusisode, Bryce and Kevin will be chatting about:
- Why Bryce chose property out of all the asset classes out there
- What motivated him to start investing in property
- His first property and the mistakes he had made in the early years
- The awareness on property investing and level of resources out there for investors
- Best advice for someone who’s thinking about starting an investment property portfolio
If you like this podcast: “Chat between TPC and Real Estate Talk – Why I love property?”, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://www.thepropertycouch.com.au/topics/.
Back in Episode 102, Bryce and Ben discussed if we are facing an affordability issue and when Jan Somers appeared on our show last month, she mentioned that her aunt was also concerned about housing affordability back in the 1950s. Now, with the Federal Budget just a couple of months away, this topic appears yet again, and it seems to be the favourite amongst our politicians.
This time, the debate is about improving affordability for first home buyers. Now, don’t get us wrong. The Property Couch believes in the Great Australian Dream and owning your home. But as mentioned before, your first home will not be luxurious nor will it tick all the criteria of your dream home. This is about setting the right expectation because you would get to your dream home, and you would be able to get that quarter acre house eventually. But it will not happen overnight. You need to work for it, and you need to be smart with your decisions especially when it comes to money and planning for the future. Your first home, may not be your dream home but this does not mean that your second or third home wouldn’t be.
That is why education around property and awareness on the risk of investing in property is so important. This is one of the suggestions that Bryce and Ben chat about to improve affordability in the Australian Property Market. Tune in to find out the rest.
And the other stuff mentioned in this episode are:
- Has the Way We Look at Financial Stability Changed Since the Global Financial Crisis? – Speech by Michelle Bullock, Assistant Governor (Financial System) of RBA: Listen/Read Here
- Core Logic’s Pain and Gain Quarterly Report : Download Here
- Fact Sheet on Guarantor Loan : Download Here
- Bryce’s video on the four players in the industry is part of the Property Formula video series. If you are interested to watch this, you can Register Here
And as always, if you like this episode (Five Ways To Improve Affordability), don’t forget to rate us on our iTunes channel and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts here: http://www.thepropertycouch.com.au/topics/