As we enter the final stretch toward the 2018 Victorian State Election on Saturday 24th November, we will hear much information about property and inherently the taxes that come from it. About half the income of the Victorian State Government comes from property related taxes and duties such as stamp duty on properties that are bought and land tax for those that own property (other than their principal place of residence.)
We will also hear about how the politicians will make our lives easier and better!! As some of these policies are announced we will look the pros and cons of what is put forward.
The new rental laws that will be ensconced in the updated Residential Tenancies Act may be through before the election and used as evidence of the current government looking after tenants. There are quite a few changes to the Act but the ones getting media attention are Pets, tenants modifying properties without the need for permission and also the landlords options to terminate a lease being seriously reduced. There are some other issues that in practice don’t change very much the current day to day running of property management such as rental increases only allowed annually and not bi-annually. In reality it is not often that landlords increase rent every 6 months. With only 9 sitting days left before the election, I will be surprised whether this gets through or simply becomes a promise for after the election.
The Andrews Government announced over the weekend that solar panel subsidies will be offered to all homeowners of houses worth less than $3m where the owners have a combined income of less than $180,000. The government is offering to pay up front over $4000 for the installation of a solar system and the homeowner will have four years to pay back half interest free. This sounds quite good for any home owners, but hopefully it will not turn into another sage like the “Pink Batts” fiasco.
The oppositions announced plans to fast track 290,000 residential lots in the growth corridors by mid 2020. This is aimed to assist housing affordability especially for first home buyers. Matthew Guy also announced he would look at stream-lining disputes in the planning process, which is quite often blamed as one of the main reasons it takes so long to get new Greenfields developments off the ground.
This is simply the opening acts for the government and opposition and we will try to keep abreast of any further policies or promises that become evident during the next 3 months before the election.
With the current clearance rates hovering in the 50’s percentile and the election looming, I cannot see the very flat property market changing that much this year, however, much of this could change if the banks loosen the purse strings on finance. Anyone that has the ability to get finance at the moment should be doing everything they can to be buying now. Once the election is over and stability is returned and the Royal Commission into Banking slips out of the spot light and banks go back to lending money to investors, the market will jump up very quickly.
If you are considering a property purchase, you are currently a landlord looking for good property management representation or you are considering selling your property, please feel free to drop me an email at [email protected] or give us a call.
Ian James
Director JPP Buyer Advocates