With property firmly on the political agenda as we approach the next Federal Election, we thought it would be timely to give you a concise update on the changes that have been made and could be made that impact the residential property market:
Compulsory Identification Verification
Applicable to both buyer and sellers, the Land Registry will not register the change of ownership unless you have first verified your identity. The Land Registry expects you’ll do this through your conveyancer or lawyer, potentially at an additional cost.
From July 1, the Victorian state government will raise the stamp duty levy on foreign purchases of residential property from three percent to seven percent. This additional duty applies to all contracts, transactions, agreements and arrangements entered into on or after 1 July 2016.
Home owners who sell a property for $2M or more will be required to provide a clearance certificate from the tax office as of July 1. Foreign owners will not be issued with a clearance certificate, with 10 percent or an agreed adjusted amount to be sent to the ATO.
Changes to Superannuation
The government has proposed a series of changes: a $1.6M limit on the amount which can be put into a tax free super account from July 1, 2017, and a $500,000 limit on post-tax contributions dating back to July 1, 2007. The annual concessional contribution cap has also been lowered to $25,000. Both these changes will impact the ability for SMSF to acquire property. These changes have not yet been enacted by parliament and do not have the commitment of both sides of government.
Capital Gains / Negative Gearing
Despite debate over negative gearing raging – no changes have been made as yet. Labor has proposed restricting negative gearing to new homes from July 2017, and to halve the CGT discount to 25 per cent. It would grandfather existing investments. The Government has promised not to touch either negative gearing or CGT.
With lots of changes afoot, the balance of 2016 will be an exciting time for the property market! We would love the opportunity to discuss your property goals with you. If we can be of further assistance with an appraisal of your property, or any other real estate matter, kindly contact us on 9091 1400.