Tools & Advice   Questions & Answers

Questions & Answers

There are many important factors to consider when it comes to buying property.
Below you'll find answers to some of the typical questions and issues that need to be considered,  whether investing in property or buying your first home.

 

Ask a Question...

Do you have a question about this article? Fill in the form below and we'll get in touch as soon as possible.

Recently Asked Questions

  • 11 07 2014
    The New Property Index is something that we have developed tohelp our clients compare projects within subrubs and across regions to determine the best value projects on the market.

    For an indepth discussion on how the New Property Index can work for you, speak to one of the iBuyNew Property Consultants on 1300 123 463.
  • 11 07 2014
    Hi - There are going to be a number of prime areas to invest in using your SMSF and it really depends on what price point you want to look at and what strategy you have for possible future investments in your SMSF. There are projects that offer higher rental returns which is great for SMSF buyers as the rent usually covers all costs. By also salary sacrificing a little each week you can have the property paid off and generating free cash flow before you retire! It's best to sit down with an iBuyNew consultant and your Financial Planner to determine the best strategy forward for you and the purchase of an investment in your SMSF.

    Contact iBuyNew on 1300 123 463 and ask to speak to our SMSF specialist.
  • 08 06 2013
    A professional tax depreciation schedule has the potential of substantially reducing your taxable income. Thus, by claiming these depreciation benefits, you as an investor, can significantly enhance your after-tax return from your investment and generate a healthier cash flow.
  • 30 04 2013
    A negatively geared investment is one where the interest on the amount borrowed exceeds the net income received from the investment‟s rental income. The tax department allows investors to claim a tax deduction on the difference between the interest paid and the net income from the property.

    When buying an investment property in this or any other way, you need to realise the full tax implications, so you can make the right choices for your circumstances.

    Negative gearing can provide tax benefits for many people. But you should consult a professional tax adviser or accountant to help you decide whether negative gearing is right for you.

  • 30 04 2013
    Price savings: For the smart investor, if you secure property at today's price in a rising market and don't settle for 12-18 months, the value of the property upon settlement will be greater than the purchase price.

    Tax Benefits: The tax benefits associated with an investment property are even greater when the property is purchased brand-new so buying off-the-plan maximises on your returns.

    Save on stamp duty: A number of States have reduced stamp duty for buyers of off the plan property.

    Time: For an owner-occupier, purchasing off-the-plan provides you with more time to organise your move and even co-ordinate the sale of your current property.

    Save for repayments: Given that settlement will not occur for 12-18 months, you have more time to save for repayments and create a substantial nest-egg.

    Greater Choice: If you're quick off-the-mark you have a greater selection of properties to choose from.
  • 29 04 2013
    A sunset clause gives you protection that the project will be completed by a specific time. This clause could be stated longer than the builder needs but it protects the builder against delays of supplies or poor weather conditions. This clause allows you to rescind the contract once the date is passed. It is important if the builder has run out of funds and puts the development on hold indefinitely. Without this Clause you are locked into the project until it is completed. A Sunset Date is also required to achieve a Deposit Bond.
  • 29 04 2013
    If for some reason, the development does not go ahead; your deposit will be repaid to you in full.
  • 29 04 2013
    Debt can be broken into two categories “Good Debt” and “Bad Debt”, as investment properties are generally con-sidered to be tax effective and assist in generating wealth, they are often considered to be 'Good Debt'. In simple terms, good debt is considered to be tax-deductable and can be used to generate an income by investing in property or shares. Bad debt on the other hand, is not tax effective and does not generate income, things such as credit cards, car finance and personal loans fall into this category.
  • 29 04 2013
    Residential investment properties can be depreciated over many years and can reduce the holding costs for investors whilst they are still acquiring assets to provide for income in later life. The building write-off allowance (division 43) allows you to depreciate the construction cost of the building from new at its original cost, for a period of forty years at 2.5% per year. If you already own property as an investment and it is less than forty years old, you are still able to legitimately claim depreciation benefits on that property.

    In addition to a building write-off allowance, your tax depreciation report will also detail additional depreciation benefits you are entitled to claim for plant and equipment (division 40). These extra depreciation benefits are for such items as air-conditioning, carpet, clothes dryers and hot water systems. In the case of strata titled property, these additional depreciation benefits can also include some of the items in the common areas of the property such as fire extinguishers, gym equipment, closed circuit televisions and monitors, barbeques and so on. All of these items are depreciated over a much faster period of time than the building cost allowances.

    Together, the building write-off allowance and the depreciation of the plant and equipment will provide you with substantial taxation benefits. This is even more so the case if the property you purchase is brand-new, as the cost base for depreciation is much higher.
  • 29 04 2013
    When your investment property is negatively geared, you may be entitled to deductions such as:
    • The interest on the loan
    • The costs of setting up the loan, including establishment fees
    • Letting agent fees to manage the property
    • The cost of advertising for tenants
    • Council rates and land tax
    • Body Corporate levies / Strata levies
    • Insurance premiums
    • Depreciation of fixtures and fittings, including furniture
    • Repairs and maintenance
    The key benefit of negative gearing is that it enables you to offset costs associated with your loan and renting the property against your tax bill — and at the highest rate of tax that you pay.
  • 29 04 2013
    The shortest answer to this question in NO! If you have owned your own home for a few years, you will have built up quite a bit of equity in your property. You will have paid off some of the loan, and there's a good chance that your property has increased in value too.

    Instead of finding a cash deposit, the Bank will allow you to use the equity built up in your home as security on your investment property.
  • 29 04 2013
    Purchasing real estate prior to, or during construction, is commonly known as "Buying off the plan”. It means you enter into a contract to purchase a property before the property title is created and the building is constructed.
  • 29 04 2013
    When buying a property off the plan the deposit is payable on signing the contract with the balance due when building is completed, settlement and hand over of title. Other costs include Stamp duty, Land tax, Council rates, Strata fees, Electricity, gas, water etc.

    When buying off the plan in Victoria, it should be noted that there are large stamp duty savings available to purchasers. Please consult your dedicated iBuyNew property consultant for further details. 

    There are also large stamp duty savings available for First Home Buyers in various states around Australia. These change from time to time so it is best you discuss this with your dedicated iBuyNew Property Consultant.
  • 29 04 2013
    Hi, The grant is only paid after settlement so you would need to save the full 10% deposit up front. If you don't have this amount saved you could take out a personal loan which could then be paid off over the course of construction or by the $15,000 grant at the time of settlement.

    There are a few stratgies that you need to think about to make sure you don't overstretch your financial situation. It would be best to speak to an iBuyNew consultant and one of our Mortgage Brokers so we can show you the numbers and determine whats price limit you could look within.

    Speak to an iBuyNew consultant by calling 1300 123 463.
Show all Questions and Answers
As featured in: