This week we start uncovering suburbs within 10km of mainland CBDs, where property is going for less than the median capital city price. And in our tax tip of the week, we look at what you can claim and can’t claim in legal expenses when it comes to rental property.
NewsThe latest figures on housing finance show there’s been a drop-off in the number of people buying property in Australia. According to the Bureau of Statistics, housing finance commitments for owner-occupied properties fell 3.9% in June, to a seasonally adjusted 46,420.The value of loans for investment fell 3.6%, to a seasonally adjusted 7,324.
Meanwhile, a global survey published in the Economist Magazine has found that the Australian property market is the most overvalued in the developed world.The results found Australia was 61% overvalued, based on the current ratio of house prices-to-rents and, historic ratios. The Hong Kong property market was the second most expensive being 53% overvalued, followed by Spain at 50%.Strong demand for buying property in Australia, coupled with a shortage of housing in populated areas, are the main factors influencing higher property prices.
Suburb in FocusIn our suburb in focus, we start a series looking at the most affordable suburbs, located less than 10ks from mainland capitals, starting with Sydney and Melbourne.
First up - Sydney where the most affordable suburb under 10 ks away is Sydenham. Located just 8 kilometres south of the CBD, the suburb’s population in the last census was 6,744. Being so close to Sydney city, Sydenham is well serviced by rail with its own station being a junction for three lines on the City Rail network: the Illawarra, East Hills and Bankstown lines. The suburb is also is well serviced by buses with the 357 linking Sydenham to Bondi Junction. Turning to the figures, the median house price in Sydenham in the year to July 2010 was $558,500, which was 7.26 % lower than the median price for Sydney of $602,250 and only one of three suburbs less than 10km from the CBD where prices were below the mean.
Further south and to Melbourne, where our second suburb is 9ks from the CBD. Braybrook is located west of Melbourne city and lies mid-way between the former councils of Footscray and Sunshine in the heart of the western suburbs before the more recent urban sprawl.Some restoration has occurred in the past decade with many former factory sites developed for townhouses however traces of its industrial past are still evident.Six bus routes go through Braybrook with services operated by Melbourne Bus Link and Westrans - with rail accessible at Tottenham and Sunshine railway stations, although neither is located in Braybrook. The suburb’s population in the 2006 census was 6,940 with about a third of the residents born overseas. The median house price in Braybrook for the year to July 2010 was $390,000, nearly 25% lower than the Melbourne median price of $515,000 and only one of five suburbs located under 10ks from the CBD with prices below the median.
Tax TipAnd now to the Tax Tip of the week from Depreciator - the Tax Depreciation Schedule specialists.
We focus on which legal expenses can be claimed on rental property.The cost of preparing a lease agreement with your tenant, and evicting a non-paying tenant is an allowable deduction and can be claimed.
But you can't claim solicitor's fees for the purchase of the property as these are consider a capital expense. Legal costs associated with defending your title to the property - for example, defending an action by the mortgagee to take possession of the property where you have defaulted under the loan - are also capital expenses.With respect to capital expenses these are usually included when calculating the ‘cost base’ of your property.The cost base of a capital gains tax (CGT) asset is generally the cost of the asset when you bought it.However, it also includes certain other costs associated with purchasing or acquiring, holding and selling or disposing of the asset. This can help you reduce the amount of CGT you pay when you sell your property.
As always this is general advice only and you should consult your accountant or tax professional before making any tax related decisions.
