Australian Housing Affordability Discussion

[drron]

$400 a week? The last time I had a land tax bill it was ~$400 a year.
Must be a fabulous piece of real estate!

Wonderful Dan changed the land tax system in Victoria.It is not assessed on individual properties but on your total value of land holdings.so if you have a home in Melbourne valued at $2 million plus a holiday home on the coast you are very likely to be paying $400 a week in land tax-of course it is not all the holiday property.But instead of paying 0.2% of the value above 250000 they are now paying 2.25% on the whole value so if the value of the holiday home is $900000 then land tax of $20250 - close enough to $400 a week.
2018 Victorian Land Tax Assessments

 

[amaroo]

Wonderful Dan changed the land tax system in Victoria.It is not assessed on individual properties but on your total value of land holdings.so if you have a home in Melbourne valued at $2 million plus a holiday home on the coast you are very likely to be paying $400 a week in land tax-of course it is not all the holiday property.But instead of paying 0.2% of the value above 250000 they are now paying 2.25% on the whole value so if the value of the holiday home is $900000 then land tax of $20250 - close enough to $400 a week.
2018 Victorian Land Tax Assessments

Did you get your DNRME letters this week ..... massive increase in valuation

 

[cove]

It seemed like a lot of land tax to me. We have to pay land tax on our business properties but a holiday home down by a surf beach out of Melbourne seems pretty harsh. Many retirees will notice $400 a week is what I was thinking.

 

[cove]

Meanwhile first homebuyers are having their actual living costs assessed rather than just a guess to prove that repayments can be handled. This has really slowed residential property transactions.
Those who took out 3 or 5 year fixed loans are getting re-assessed as the new loan will be principal and interest as well as a current valuation being required.
Some may have to sell if they cannot qualify for a new loan.

 

[pauly7]

It’s really interesting and the price drops are almost a self fulfilling prophecy.

Good inventory has dried up especially in the coveted inner suburbs. People are holding onto the quality stand alone stock.

Only the dregs are making it onto market and people forced to sell (relocation etc) are selling. So the overall quality of stock on the market is much lower. This is driving down prices as an average. As we know averages are very different when comparing anything.

It’s interesting no one is really digging beneath the headlines and looking at inventory by suburb, but I guess that’s too much work!

 

[Hvr]

It’s interesting no one is really digging beneath the headlines and looking at inventory by suburb, but I guess that’s too much work!

Or too much work to read the media?

https://www.theage.com.au/politics/...house-price-belt-of-pain-20190313-p513u2.html

https://www.theage.com.au/politics/...est-fall-in-house-prices-20190314-p51473.html

 

[CaptJCool]

It’s really interesting and the price drops are almost a self fulfilling prophecy.

Good inventory has dried up especially in the coveted inner suburbs. People are holding onto the quality stand alone stock.

Only the dregs are making it onto market and people forced to sell (relocation etc) are selling. So the overall quality of stock on the market is much lower. This is driving down prices as an average. As we know averages are very different when comparing anything.

It’s interesting no one is really digging beneath the headlines and looking at inventory by suburb, but I guess that’s too much work!

https://www.canberratimes.com.au/po...est-fall-in-house-prices-20190314-p51473.html

https://www.canberratimes.com.au/po...-the-worst-still-to-come-20190313-p513u4.html

How rapidly could mortgage stress spread if interest rates rise?

Also that Victorian land tax loophole was known back in the 90s

It’s why more Trusts are registered in Victoria than in NSW.....Because they were assessed individually not as what now appears to be the case under new laws joint and severally liable for anything in the ownership umbrella.

 

[pauly7]

Or too much work to read the media?

https://www.theage.com.au/politics/...house-price-belt-of-pain-20190313-p513u2.html

https://www.theage.com.au/politics/...est-fall-in-house-prices-20190314-p51473.html

Nope, have read all those, they don’t dig beneath the averages though and investigate stock quality. It would be far too much work (for anyone not just the media).

 

[pauly7]

https://www.canberratimes.com.au/po...est-fall-in-house-prices-20190314-p51473.html

https://www.canberratimes.com.au/po...-the-worst-still-to-come-20190313-p513u4.html

How rapidly could mortgage stress spread if interest rates rise?

Also that Victorian land tax loophole was known back in the 90s

It’s why more Trusts are registered in Victoria than in NSW.....Because they were assessed individually not as what now appears to be the case under new laws joint and severally liable for anything in the ownership umbrella.

Thanks, the last article is more interesting the other two just the same old story.

Maybe I should pick a suburb and do it myself see if I can sell it as a free lance

 

[drron]

Nope, have read all those, they don’t dig beneath the averages though and investigate stock quality. It would be far too much work (for anyone not just the media).

There is at least one service I know of but you have to pay and it is not cheap.
Besides I don't think it will matter that much when the real crunch comes.personally i believe the can will be kicked down the road for a fair bit longer as no pollie wants to have ordinary folks wealth disappear on their watch.But disappear it will at some point.

 

[pauly7]

There is at least one service I know of but you have to pay and it is not cheap.
Besides I don't think it will matter that much when the real crunch comes.personally i believe the can will be kicked down the road for a fair bit longer as no pollie wants to have ordinary folks wealth disappear on their watch.But disappear it will at some point.

Thanks, yes just get frustrated reading the same old stories in the media using averages of averages which means the articles are just generic scare pieces that worry people. Don’t get me wrong, some might/ought to be worried! But it’s highly nuanced and fragmented.

A friend of mine works in property economics and sometimes will drop pieces of information that are more insightful so I do know of $$$ reports you can access too

 

[CaptJCool]

Thanks, yes just get frustrated reading the same old stories in the media using averages of averages which means the articles are just generic scare pieces that worry people. Don’t get me wrong, some might/ought to be worried! But it’s highly nuanced and fragmented.

A friend of mine works in property economics and sometimes will drop pieces of information that are more insightful so I do know of $$$ reports you can access too

From what I can gather, listings have fallen off a cliff.... bit like our homeless folk all over the country.

And so have sales. stamp duty has dived and all state governments will end up short

CoreLogic do a quarterly report about profit / loss. Aside from those doozy of price drops in remote Australia adjacent mining areas, (sounds a bit like the 80s Gold Coast scams)

The key point is hold property for 10 years or more you can expect a profit on sale. Even $1000 more is a profit.

The only ones financially losing are where big micro businesses go bust and the fsmily home was bank finance collateral. These may well be sold at fire sale other losers are the LIFOs. Last in first out in a falling market

For the vast majority of ordinary AUssies. It’s sll irrelevant. Bought before 1998, you’re a winner

And ya gotta live somewhere. So most people just live in their place never intending to sell

 

[rainbowgirl]

"Bought before 1998, you're a winner"
@CaptJCool What is the significance of this date?
We purchased our home in 1999 in Melbourne so am wondering where we stand.

 

[CaptJCool]

"Bought before 1998, you're a winner"
@CaptJCool What is the significance of this date?
We purchased our home in 1999 in Melbourne so am wondering where we stand.

I’ll see if I can dig out a graphic that shows the housing price escalations.

There was a huge banking downsizing in around ‘98 & mortgage brokers were privatised.

Voila upswing in prices. ....
Horror graph shows why Australia is screwed Price uplift began in 1999....

On that basis your purchase price will be much lower than today’s sales prices ...

 

[PDog]

Wonderful Dan changed the land tax system in Victoria.It is not assessed on individual properties but on your total value of land holdings.so if you have a home in Melbourne valued at $2 million plus a holiday home on the coast you are very likely to be paying $400 a week in land tax-of course it is not all the holiday property.But instead of paying 0.2% of the value above 250000 they are now paying 2.25% on the whole value so if the value of the holiday home is $900000 then land tax of $20250 - close enough to $400 a week.
2018 Victorian Land Tax Assessments

I'm in Victoria....so sorry for taking this down a rabbit hole!
That was the general principle when I last paid it, but your home (principle place of residence) was excluded. So for a $20k tax bill is not for the $900k of land the beach house is on, it's also the $2m Melbourne home (land value) investment property?

 

[drron]

I'm in Victoria....so sorry for taking this down a rabbit hole!
That was the general principle when I last paid it, but your home (principle place of residence) was excluded. So for a $20k tax bill is not for the $900k of land the beach house is on, it's also the $2m Melbourne home (land value) investment property?

The 20K tax bill is the 2.25% of 900000 if your total property holdings are worth over $3 million.Just using that figure to show that $400 a week land tax is possible.You will be paying~ $25K on the first $3 million.

 

[travelislife]

The 20K tax bill is the 2.25% of 900000 if your total property holdings are worth over $3 million.Just using that figure to show that $400 a week land tax is possible.You will be paying~ $25K on the first $3 million.

But isn't your PPOR exempt? And it's the actual land value, not your property holdings. So if you have over $3m in land value outside your PPOR you are getting in to some pretty serious property value territory there!

 

[PDog]

But isn't your PPOR exempt? And it's the actual land value, not your property holdings. So if you have over $3m in land value outside your PPOR you are getting in to some pretty serious property value territory there!

thanks, exactly what I was going to ask!

Hope you're right, else I'm waiting for a tax bill!!

 

[Happy Dude]

The 20K tax bill is the 2.25% of 900000 if your total property holdings are worth over $3 million.Just using that figure to show that $400 a week land tax is possible.You will be paying~ $25K on the first $3 million.

My reading of the info in your link drron, is that the land tax applies only to land held in trusts and absentee owners.

 

[drron]

The trustees land tax obligations are new-there are separate tables.

and my mistake the PPOR is exempt-I took that article to list all the exemptions but it is only the new definitions.