Smart buying key to coping with increased land tax
The recent State Budget announcement of an increase in land tax should not deter buyers from choosing to invest in property.
The rate of tax imposed by the Land Tax Act 2002 will increase by 12.5%, with the new tax scale to apply for the 2013-14 assessment year. However, the team at Property Wizards believe Perth property buyers have every reason to remain confident in property investing and developing as a means of creating and accumulating wealth.
With low interest rates, continued population growth forecast and increasing capital growth and rental returns, there are still opportunities to achieve above-average market performances. However, you must engage smart buying tactics to help ease any financial pressure.
With less margin for error, equip yourself to make the right decisions. It is now even more important to choose the right property in the right location, and to buy at the right price.
Potential property investors can take steps to minimise the impact of the land tax increases.
Consult professionals to understand your individual options and to make an educated and well thought out decision. Seeking professional advice on how to best structure your purchase can help ensure you don’t pay any more than required.
It is also important to consider how you can get the most value. Buying and subdividing is one way of adding value, for example, whereby you can minimise your expenses at the time of purchase.
President of the Real Estate Institute of Western Australia, David Airey, has called the land tax increases ‘a kick in the shins for property investors, who supply two thirds of rental stock in WA.’
However, we believe that while the move is not popular among investors, the opportunities still exist to buy great investment properties that will deliver financially, although they are increasingly hard to find.
The Perth property market is still tight and many people who are actively looking for the perfect opportunity are having trouble finding a suitable property where they can add value. Properties likely to perform well are homes close to the beach or the river, because of limited supply and high demand and properties close to amenities, schools and transport – which attract tenants.
Also announced in the State budget, the exemption of stamp duty will remain for first home buyers, while the First Home Owners Grant will increase from $7,000 to $10,000 for the purchase or construction of a new home and decrease to $3,000 for an existing home.
If you have an interest in building your wealth through property, then call us on (08) 9381-7450, or request a FREE Starter Pack.