Our series looking at capital city suburbs with the longest hold periods, takes us to Brisbane this week. And in our tax tip of the week, we look at whether you need to register for GST when dealing in property.
NewsIn property news, the great dream of owning a home in Australia is deflating according to research out from the Flinders Institute for Housing, Urban and Regional Research. In the decade between 1996 and 2006, the Institute found Australian home ownership added a modest 0.8 per cent, despite economic growth and relatively low interest rates. After 1996 average house prices rose by three times on average to around 6.8 times medium household income, while debt levels soared. In other news, The Australian Bureau of Statistics has revealed that total personal finance commitments in July dropped 0.7 per cent to $6.833 billion. Owner occupied housing finance was up 2.3 per cent to $13.761 billion also for the month of July.
In our suburb in focus, we continue a series looking at suburbs with the longest hold periods in capital cities around Australia. This week we look at two suburbs in Brisbane. First let’s look at the housing market in Point Lookout, located around 62 kilometres east of Brisbane’s CBD.
According to figures from RP Data, properties in Point Lookout are held for just over 14 years, one of the longest hold periods of any suburb in Brisbane. The suburb’s population in the 2006 census was 669. Point Lookout is a small village located on the east coast of North Stradbroke Island. The suburb is made up of residential housing and tourist apartments close to the beach or built on top of ridges to make the most of the views of the Pacific Ocean. There are a number of small shops, cafes and restaurants in Point Lookout, a caravan park and a lighthouse. Turning to the figures, the median house price in Point Lookout in the year to May 2010 was $897,500. The average hold period for a house in the suburb is 14.2 years. 14 properties were sold in Point Lookout for the 12 month period.
Our next suburb is the house market in Sheldon, located around 31.5 kilometres south-east of Brisbane’s CBD. RP Data figures reveal that properties in Sheldon are held, on average, just under 14.5 years before being sold. This is the longest hold period for any suburb in Brisbane. With a population of 1,733 Sheldon is located within Redland City one of the fastest growing areas in not only Queensland but Australia. Sheldon is also part of the South-East Queensland’s largest koala protection zones and plays an important role in the preservation of Queensland’s koala population. Taking a look at the figures, the median house in Sheldon for the year to May 2010 was $760,000. The average hold period for a property in the suburb was 14.4 years with 20 properties sold in the 12 month period.
Tax TipAnd now to the Tax Tip of the week from Depreciator - the Tax Depreciation Schedule specialists. This week we look at whether you need to register for GST when dealing in property. Many people are actually carrying on an enterprise when making property transactions but do not register for GST when they are required to do so. If you do not register for GST and you are required to do so, you may have to pay GST on the sales you have made since the date you became required to register – even if you did not include GST in the price of those sales. Penalties and interest may also apply. Even if you are not in business, you may still be required to register for GST as one-off property transactions may be an ‘enterprise’.
If you buy property with the intention to sell at a profit or develop property to sell, you may be considered to be conducting an enterprise. If your turnover from these activities is more than the GST registration threshold you may be required to register for GST. Generally, you are not considered to be carrying on an enterprise if your property transactions are for private purposes, for example you are constructing or selling your family home. If your property activities are considered to be an enterprise and you need to register for GST, you do not include any of the following activities when calculating your GST turnover for registration purposes: the sale of a residence that is not new residential premises, sales you make that are for no payment (unless they are made to an associate), other property sales you make that are private and not connected to your enterprise (such as your family home), residential rental income.
If you construct new residential premises, and you sell it in the course of your enterprise, it will be included in your GST turnover calculations to determine whether you should register. Residential premises are new when: They have not been sold as residential premises before and have not been previously leased long term, they have been created through substantial renovations, new buildings replace demolished buildings on the same land.
And as always, remember to consult with a tax accountant or tax professional before making any tax related decisions.
