PropertyBuzz, your daily dose of property news.
The tax office flags top problems for rental property deductions; one consistent shortage holds back home building; and the 10 destinations primed for Airbnb investors
Welcome to Property Buzz! I’m Sebastian Holloman.
Today is Thursday the 23rd of May, and The Australian Tax Office has warned investors and accountants to be vigilant around the common errors in property deductions, including incorrect apportioning of interest from investment loans and confusion between repairs and improvements.
– ATO assistant commissioner Robert Thomson revealed that these mistakes contribute around $1.2 billion to the tax gap and emphasized the need for clarity on what constitutes a repair versus an improvement.
– Thomson also highlighted that initial repairs or costs before tenants start renting are not considered initial repairs, meaning that they can’t be fully claimed on that year’s tax return.
– Recent ATO data showcased that nine out of ten rental property owners are incorrectly filing their income tax returns, these findings highlighting the importance of providing complete records to registered tax agents.
– The Housing Industry Association has identified land supply as the primary constraint on home building, with land prices already rising following a modest recovery in sales.
– Residential lot sales increased by 0.9 per cent in the December quarter, up by 24.6 per cent over 2023. Brisbane, Adelaide, and Perth were found to be popular markets, while sales in Sydney, Melbourne, and Hobart remain low.
– While land prices in Brisbane, Adelaide, and Perth are nearing record highs, prices in Sydney, Melbourne, and Hobart were found to be elevated but contained. These findings suggest that it will not be long before the number one constraint on new home building will once again be the availability of land.
– With higher interest rates and low land supply having led to a 12.8 per cent fall in new dwelling approvals over the past year, the HIA has urged governments to increase land supply.
– Canadian data provider AirDNA has identified the top 10 Australian locations for short-term rental investors, when taking into consideration rental demand, revenue growth, seasonality, and government regulations.
– The top 10 Australian Airbnb markets were identified in order as Perth, Brisbane, the Whitsundays, Canberra, Margaret River, Sydney, Newcastle, Hobart, Adelaide, and the Gold Coast.
– Increasing regulations in popular markets like Victoria and Byron Bay were found to have made these areas less profitable for Airbnb owners.
– Contrastingly, locations with less stringent regulations such as Perth and Brisbane were ranked the highest, with these areas’ tourism economy benefiting from short-term rental properties.
That’s Property Buzz for today.
See you again tomorrow, the 24th of May, for your daily dose of Property Buzz.
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