IntroThis week we are beginning a series looking at high growth suburbs where median house prices are under $600,000. This week’s focus is outer western Sydney suburbs. And in our interview this week we speak with Scott Brunsdon from tax depreciation specialist, Depreciator, about common mistakes property investors make accounting for depreciation.
In this week’s tip we look at new legislation that will affect high income earners who have rural property investments.
NewsIn property news, the Australian Industry Group/Housing Industry Association’s Performance of Construction Index fell 3.3 points to a read of 47.6 in November. The drop in the index taking it below the 50 mark indicating contraction in the sector. And the ABS released figures showing a 1.4% drop in housing finance in October.
In other news, a waterfront mansion in Perth has sold for an Australian record of $57.5 million. Mining heiress Angela Bennett sold her Saunders St, Mosman Park property to fellow mining magnate Chris Ellison who is the executive director of listed contracting and engineering firm Mineral Resources. The property has been on the market since 2007, with an original price tag of $70 million.
Suburb in FocusIn our suburb in focus section each week, we look at property markets around Australia that could be of interest to property investors. We have compiled a list of the top growth suburbs in the last 12 months for each capital city around Australia that also have median house prices under $600,000. This week the focus is outer western Sydney - we’re looking at Leumeah but first up is Green Valley which is located about 39 kms west of Sydney’s CBD.
Green Valley is a family suburb with 85% of homes containing families and 82% of these families contain children. 21% of dwellings are rental properties. Houses make up 82% of properties while semis make up 18%. Green Valley’s residents work in trades and clerical industries and almost half of residents are born overseas. The median house price in Green Valley is $408,000 dollars, which is a huge 18% higher compared to a year ago. There have been 176 houses sold in the 12 months to November 30. The median rent price for a house in the suburb is $380 which brings the gross rental yield to 5%.
Now to the unit market in Leumeah which is located about a 50 km drive south west of Sydney’s CBD. 85% of dwellings are stand alone houses. 75% of dwellings are families while 68% are of these families contain children. 28% of homes in the suburb are rental properties and Leumeah’s residents are employed in clearical, trades and professional roles. The median house price in Leumeah is $309,950 dollars, which is an increase of 14% compared to a year ago. There were 193 houses sold in Leumeah in the 12 months to November 30. The median rental price is $280 bringing the gross rental yield to 5%
Tax TipNew government legislation being introduced by the Rudd government will see the closing of a tax loophole that has allowed high income individuals to claim tax deductions from losses on their hobby farms, lifestyle investments and other non commercial losses.
Currently, individuals with taxable incomes of more than $250,000 who own, for example, a hobby farm can use the losses from the farm to offset their other income if they pass tests on business activity, revenue and assets but this is about to be stopped unless the Commissioner of Taxation assesses the activity as being genuinely commercial. The changes are expected to contribute $700 million to the government.
So if you make more than $250,000 a year and amongst your property portfolio is a hobby farm, go and speak with your accountant and get the right advice.
