This week we continue our series looking at suburbs with the most affordable median prices in 2010, with a focus on two suburbs in the Northern Territory. We speak with Harley Dale, the Housing Industry Association’s Chief Economist on interest rates. And in our tax tip we look at illegal unit trusts.
News:
In the wake of the devastating natural disasters that hit Queensland at the beginning of the year, the Property Council of Australia has welcomed interim planning initiatives to provide options for owners rebuilding their homes, and, clear guidelines for developers of new dwellings. The Brisbane City Council announced the introduction of an interim flood level earlier this month, meaning that the habit-able floor level for new Brisbane houses in flood-prone area’s will need to be built above the flood level recorded. The Property Council believes the new planning initiatives send a clear signal that Brisbane is open for business as it starts rebuilding the city and its economy. The State Government’s Queensland Flood Commission of Inquiry is due to deliver its interim report in August this year. The Property Council says Brisbane cannot stay in limbo for the next year and so, while the planning initiatives may later be amended, the latest decision provides a welcome and workable solution for the city.
Suburb in Focus
This week we continue our series looking at suburbs with the most affordable median prices in 2010, with a focus on two suburbs in the Northern Territory.
First let’s look at Herbert, an outer rural locality of Darwin located 47 kilometres south-east of the state’s capital city. With a population of 801 in the 2006 census, the suburb is bordered by Girraween Road in the north and Pioneer Drive in the south. The suburbs of Girraween and Humpty Doo are to the west and east respectively. Mostly a rural area, the suburb was previously considered a part of Humpty Doo. Four bedroom houses are characteristic of the suburb, some architecturally designed. Many boast fully fenced acreages with their own bore, water tanks and tropical gardens.
Turning to the figures, houses in Herbert recorded the capital’s most affordable median price in 2010 of $410,000. 51 properties were sold in the year.
Our next suburb is Moulden, it is located 24 kilometres south-east of Darwin’s CBD. With a population of 3,363 in the last census, it is bordered by Tilston Avenue in the north, Temple Terrace in the east, to the south is Chung Wah Terrace and Elrundie Avenue in the west. Moulden is an outer-city suburb of Palmerston and more than a fifth of the population is indigenous, according to the last census data. It is a newly residential area, many of the modest three to four bedroom houses were built in the mid 1980s. Palmerston High School and Moulden Park Primary school are within the suburb. There is also the Palmerston Leisure Centre with an Olympic swimming pool next door to netball and tennis courts.
Turning to the figures, houses in Moulden recorded the capital’s second most affordable median price in 2010 of $425,000. 65 properties were sold in the year.
Interview
We speak with Harley Dale, the Housing Industry Association’s Chief Economist on interest rates.
Tax Tip
And now to the Tax Tip of the week from Depreciator - the Tax Depreciation Schedule specialists.
The Australian Taxation Office is warning investors against promoters of tax planning arrangements that may sound like a good investment, especially towards the end of the financial year, but are in fact illegal.
The case study the ATO refers to is an illegal home loan unit trust arrangement. In this example, a promoter says they can make your home loan interest payments tax deductible. Using a unit trust, the scheme promoter sets you up to borrow funds to purchase a property. You live in the property and pay rent to the unit trust. The trust declares the rent as taxable income. The trust claims expenses and interest charges as deductions against rental income, and you claim a tax deduction for the interest payments on borrowing. The ATO warns that this scheme is in fact illegal. It is illegal because it involves getting a tax benefit from borrowings for private expenses – your home. You are not legally entitled to claim the interest payments as deductions. You risk having to pay penalties and interest.
As always, do remember to consult with a tax accountant or tax professional before making any tax related decisions.
