This week we continue looking at the most affordable suburbs less than 10 km from mainland capitals, going to Adelaide and Perth.
And in our tax tip of the week, we look the ATO definition of borrowing expenses and what's claimable on rental property.
NewsNew figures suggest that an increasing number of property hunters across the country are being squeezed out of the market.The latest HIA-Commonwealth Bank Housing Affordability Index shows that nationwide housing affordability dropped 6.1 per cent in the June quarter, and declined 31.6 per cent in the year to June.The index is calculated by combining the impact of interest rates, property prices and household incomes.The largest falls were recorded in Sydney, down 9.1 per cent, regional Victoria falling 9 per cent, regional Tasmania fell 8.8 per cent, and Adelaide with housing affordability falling 8.7 per cent.
Suburb in FocusIn our suburb in focus, we keep looking at the most affordable suburbs, located 10kms from mainland capitals, this week in Adelaide and Perth. First up we're off to Adelaide where the most affordable suburb 10kms away is Wingfield.It's located just north of the CBD, the suburb’s population in the last census was 9,688. Wingfield is on the Grand Junction Road and borders the suburbs of Gepps Cross and Dry Creek and is part of the City of Port Adelaide Enfield, one of the larger metropolitan councils within South Australia. Shoppers can get their fix at the nearby Arndale Shopping Centre Kilkenny or in Port Adelaide.Turning to the figures, the median house price in Wingfield in the year to July 2010 was $264,000, 35 % lower than Adelaide median of $406,500 and is one of 36 suburbs less than 10km from the CBD where prices were below the median. Heading west now to Perth and the suburb of Cloverdale. It's ranked as the most affordable suburb 10kms east of Perth's CBD. Located in the City of Belmont it has its origins in a subdivision in the area advertised for sale in 1910, officially being recognised as a suburb in 1954.
The suburb’s population in the 2006 census was 6,457 and is almost completely residential.However, its boundaries take in a commercial and civic area on the western side although Perth Airport is immediately to the east beyond Tonkin Highway, and on the other side of Leach Highway, is the Kewdale industrial area which is one of Perth's largest. Shopping is well catered for at the Belmont Forum SC.
Turning to the figures. The median house price in Cloverdale for the year to July 2010 was $415,000, 16% lower than the Perth median price of $495,000 and one of 11 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 what the ATO deem as borrowing expenses and allowable deductions on rental property.You can claim all of the following:- stamp duty charged on a mortgage- loan establishment fees- title search fees charged by your lender- the costs of preparing and filing mortgage documents- mortgage broker fees- fees for a valuation required for loan approval, and:- lender's mortgage insurance, which is insurance taken out by the lender and will billed to you.
Now to what can't be claimed - stamp duty charged by your state or territory government on the transfer or (purchase) of the property title. This will generally be included in calculating the 'cost base' of the property for capital gains tax (CGT) purposes.
Another thing that can't be claimed as a borrowing expense, is the stamp duty you incur when acquiring a leasehold interest in property. But, and there is a but you may be able to claim this as a lease document expense. Also exclusded are, insurance premiums where your loan is paid out in the event that you die, become disabled or unemployed or borrowing expenses on the portion of the loan you use for private purposes.So while these expenses can be claimed in some cases it’s not as borrowing expenses and if claimed as such would be rejected - highlighting the importance of getting professional help with your tax return.
As always this is general advice only and you should consult your accountant or tax professional.
