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24-02-2005

From: AAP

THE Federal Government’s first homeowners grant was here to stay, Treasurer Peter Costello said today.

Mr Costello said he envisaged the scheme, which gives first home owners $7000 to buy a property, could continue indefinitely.

“I introduced it, it was my idea, I think it has been a good idea and I am not in the business of taking that $7000 away from first home buyers,” Mr Costello told Sydney radio 2GB.

“It has given young people the opportunity to get into the market which they wouldn’t have had otherwise.”

Last week, Reserve Bank chief Ian Macfarlane raised concerns about the disproportionate amount of money Australians had poured into housing compared to other investments.

Last June, the Federal Government rejected Productivity Commission advice, which blamed tax breaks for property investors for fuelling the house-price boom.

The commission called for an urgent review of the tax treatment of rental property, along with bans on millionaires taking advantage of the $7000 first home owners grant.

Mr Costello said the grant would remain in the Government’s Budget, to be handed down in May.

He said one of the main reasons for the recent property boom and surge in prices was the lack of land released for housing.

“I think one of the things that you probably need to overcome the problem of prices, particularly in Sydney, is you probably need more land release,” Mr Costello said.

“That is one of the things that we have looked at and we have recommended to the State Government.

“If you want to lock up all of the land, that land which is available for housing is going to become more expensive.”

The Government introduced the first homeowners grant five years ago to help offset the GST, which was also introduced in 2000.

ARE YOU MISSING OUT? According to industry research about 80% of property investors do not fully utilise and take full advantage of the available Tax Depreciation benefits for their investment property.

Depreciation is an important element of maximising the investment returns from your income generating investment property when you purchase an investment property from the Professionals – Frank Sellars and Company.

Depreciation is the legislative allowance made by the ATO under The Income Tax Assessment Act 1997. It allows investors to claim a tax deduction to offset the decline in value of the buildings and plant as they age while being used to produce the investment income.

Annual deductions, depending on the age of the asset, can amount to thousands of dollars which has valuable benefits for your cashflow and for the rate of return on your investment. Very importantly, your asset DOES NOT need to be new to enable you to claim a deduction. However, the amount claimed does require some technical knowledge to be valid in the eyes of the ATO.

Quantity Surveyors are recognised by the ATO as suitably qualified to determine your property’s depreciation entitlements. For an income producing investment asset their fee is tax deductible. For general information about Quantity Surveyors CLICK ON THE LINK toward the top of the right side of this page (make sure your web browser allows pop-ups). You might also like to google “tax depreciation allowance” for more information or talk to us about this important subject.

To find a property in your target location CLICK on the relevant link in the right hand column of this page. Professionals offices in Australia, New Zealand, Papua New Guinea and South-East Asia have a complete range of quality properties for your selection.

Confused about which loan and what interest rate?? Try the CANNEX website where you can check loan information for a variety of lending institutions. Go to the column at the right hand side of this page and CLICK on the appropriate internet LINK.

If you are an overseas investor your purchase of property in Australia may be subject to the approval of the Australian Foreign Investment Review Board (FIRB). For direct access to the FIRB site click on the relevant link in the column to the right of this page.