New strata laws will start on November 2016. They have been modernised to fit the reality of
living in a strata townhouse or apartment today.
The new building defect bond scheme will start on 1 July 2017.
Currently more than a quarter of NSW’s population lives in, owns or manages strata.
Many new requirements will not impact strata communities immediately. This includes allowing
time for pre-appointed strata managing agents, building managers and executive committee
members to continue in their roles once the law reforms start.
Contact your property manager for more information or check out www.fairtrading.nsw.gov.au.
Pest & Building Reports
The Real Estate Institute of NSW (REINSW) has been lobbying for many years to have compulsory pest, building and strata reports included with a Contract for Sale of Land. The NSW Government has decided to make pre-purchase pest and building reports more accessible to consumers, which is a good thing albeit that it will be our responsibility to keep the records. It will soon be compulsory for agents to enter the contact details of every known pest and building report conducted on a property into a register that can be supplied to prospective buyers. It will not be compulsory for inspectors to share the reports but it will be encouraged and is expected to lead to a different approach to how reports are supplied. The finer details are still being finalised.
Stamp Duty & Land Tax
The average stamp duty on the purchase of the median house price in Sydney has risen in 30 years from 2% of the purchase price to close to 4% with the the NSW State Government collecting over $10 billion in 2015 from stamp duty alone. Land Tax revenue has had increases of over 30% in the past two years.Property buyers in NSW are deciding not to move home due to the burden of stamp duty which is causing limited supply of property. The REINSW continues to pressure State Government to either ease the overall rates or, at least, provide concessions to first home buyers and retirees.
Since the 2014 Industry Summit the Real Estate Institute of NSW Board has been working towards achieving real outcomes in the areas identified by delegates. The six key areas are:
Improving services and costs and strengthening relationships with portal groups and how improvements can be made.
The REINSW parted ways with REIA some years ago after the REINSW Board took a critical look at the services provided by REIA after it agreed the national body was not operating effectively. The REINSW will consider rejoining REIA after receiving information on further reforms for the industry.
Lifting Education Standards
There is overwhelming support for high education standards in the industry. The State Minister for Innovation and Better Regulation – Victor Dominello – has a reform agenda and demonstrated a real desire to work more collaboratively with the REINSW to achieve the best outcomes for the profession and consumers
The REINSW’s participation in thereal Real Estate Reference Group is a positive step to achieving a co-operative relationship with government and by working together with Minister Dominello they can embrace the necessary reforms. The REINSW is also working with government on a wide range of issues including underquoting, education standards, licensing requirements, asbestos and pest inspections etc
The NSW Office of State Revenue needs to provide clarity around the issue of contractors and employees. The rules regarding payroll tax need to be black and white. REINSW also continues to work closely with the Real Estate Employers Federation (NSW) to ensure that members receive timely and accurate information and advice on this issue
The Role of Property Managers
Clarifying the responsibilities of property managers is on the agenda for the Real Estate Reference Group. The job description has changed dramatically and legislation needs to acknowledge this. Property Managers are now expected to make assessments on smoke alarms, decks and balconies, glass, window safety devices, blind cords, swimming pool, asbestos and more
The 2015 Industry Summit – scheduled for 27 November 2015
The REINSW is committed to continue to work with members and the wider profession to secure better outcomes going forward.
Warwick Williams Real Estate has been a member of the REINSW for over 38 years and is committed to best practice values. Warwick was a founding member of the Real Estate Institute Political Action Committee.
Timely tax reminders
A capital gain, or capital loss, is the difference between what it cost you to obtain, maintain and improve the property (the cost base), and what you receive when you dispose of it. Amounts that you have claimed as a tax deduction, or that you can claim, are excluded from the property’s cost base.
The most common questions we receive regarding this tax are primarily concerning dates surrounding the applicability of gain, dates upon which a gain is crystalised, when do profits or losses need to be accounted for and whether CGT is payable on deceased estates.
By way of brief summary:
Properties acquired before 20 Sept 1985 are exempt from CGT (important to note however that a gain or loss from capital improvements made after this date may apply).
A gain or loss is deemed to be crystalised at the date a contract is entered into (date of exchange) for the sale of the property, not the date of settlement. This is particularly relevant around the end of Financial year as a contract entered into before the 30th June results in the gain/loss occurring in that financial year, despite the fact that the property may not be settled until the following financial year.
Gains are required to be included in the property owners’ taxable income in the financial year within which the property is disposed of, however if a loss is incurred through the sale or transfer of the property this loss can be carried forward indefinitely to be offset against any current or future gain.
Gains surrounding Deceased Estates can be complex, however generally speaking where the property has been used as the primary residence of the deceased, the beneficiaries have a period of 2 years to dispose of the property without applying CGT.
For a more comprehensive overview of the intricacies of this tax please we recommend
speaking with your accountant or visiting the Australian Tax Office website.