PIPA In the News

08 May

The Labor Party’s plan to restrict negative gearing on newly built properties could lure in spruikers into the market, according to Property Investment Professionals of Australia (PIPA).

“When you financially incentivize people to buy a particular product, spruikers are not far behind because they see an opportunity to make a lot of cash very quickly,” said PIPA Chairman Peter Koulizos.

The spruikers would endanger the financial lives of thousands of Australians, he said.

Koulizos noted there is currently no legislation to protect consumers from dodgy operators pretending to be property investment experts.

07 May

The Property Investment Professionals of Australia chairman is calling for regulation in the property investment advice space to “drive out crooks” and protect consumers.

According to the chairman of the Property Investment Professionals of Australia (PIPA), Peter Koulizos, regulation is needed in the property investment space as “there is currently no legislation to protect consumers from dodgy operators pretending to be property investment experts”.

Mr Koulizos issued the call after warning that the Labor Party’s proposal to restrict negative gearing to new property could “flood the market with spruikers and endanger the financial lives of thousands of Australians”.

07 May

Labor’s negative gearing proposal will flood the market with spruikers and endanger the financial lives of thousands of Australians, according to the Property Investment Professionals of Australia.

PIPA chairman Peter Koulizos said the policy would encourage unscrupulous operators into the market looking to take financial advantage of everyday investors.

“When you financially incentivise people to buy a particular product, spruikers are not far behind because they see an opportunity to make a lot of cash very quickly,” he said.

“There is currently no legislation to protect consumers from dodgy operators pretending to be property investment experts.”

26 Apr

Leveraging your savings to invest in property at an early age is a widely accepted wealth strategy, but is it ever too late to invest?

Peter Koulizos, chairman of the Property Investment Professionals of Australia, said it was never too late to buy a property, but the question comes down to “how old is too old to borrow to start investing?”

“If you are 70 years of age, you are going to find it very difficult for anyone to give you a 30-year loan to buy an investment property,” Mr Koulizos told Smart Property Investment.

“If you are looking to retire on a, one assumes, lower income than you’re on now, it is going to be very difficult to be paying off a, what is going to be in the main, a negatively geared property.”

“If you make a mistake, you don’t have a lot of time to make up for it, unlike if you were buying at 25 or 30, so you need to get very good advice from a very good property accountant.”

24 Apr

The Tax Office has warned that it will be scrutinising claims by property investors in the upcoming tax season.

The Australian Taxation Office (ATO) announced that it would be doubling the number of audits scrutinising property investors’ rental deductions this year to 4,500, after finding that nine out of 10 randomly selected claims contained an error.

“We are concerned about the extent of non-compliance in this area and will be looking very closely at claims this year,” ATO assistant commissioner Gavin Siebert said.

Mr Siebert noted that the Coalition government recently allocated additional funds in its 2019-20 budget to the ATO to extend its program of audits and reviews of rental properties.

As part of its crackdown, the Tax Office’s focus will be on “over-claimed interest, capital works claimed as repairs, incorrect apportionment of expenses for holiday homes let out to others, and omitted income from accommodation sharing”.

The assistant commissioner cautioned that the ATO’s methods for detecting “dodgy” claims are becoming increasingly advanced.

24 Apr

Depending on who wins the May 2019 federal elections, property investors could be facing major changes in policies. Smart Property Investment lays out all you need to know about Labor’s proposed changes in negative gearing and tax reforms.

What is negative gearing?

Negative gearing occurs when the interest and other expenses that the investor is paying is more than the income or rental return that the property generates – meaning, they are essentially making a loss.

One of the main advantages of holding a negatively geared property is the ability to offset any loss incurred, including depreciation, against the investor’s taxable income. In some cases, the tax savings can exceed the total net loss of the negatively geared property.

By implementing negative gearing as a strategy, the property-related costs are, in essence, paid for by your tenant through rental returns, by the Australian Taxation Office through tax savings and by your own surplus cash flow.

23 Apr

The New Zealand government has announced that it would not proceed with the proposal to impose a capital gains tax due to lack of public support.

The Prime Minister of New Zealand, Jacinda Ardern, has ruled out the introduction of a capital gains tax (CGT) under her leadership, despite being one of the main issues she campaigned on with the view that it could make the nation’s taxation system fairer.

The CGT was recommended in February by the Tax Working Group, which the government spent $2 million on to review inequities in the nation’s taxation system. The proposed capital gains tax covered assets such as residential rental homes, investment properties, land and buildings, business assets, intangible property and shares.

“I genuinely believe there are inequities in our tax system that a capital gains tax in some form could have helped to resolve. That’s an argument Labour has made as a party since 2011,” Ms Ardern said.

But due to no consensus being reached within the Coalition government and poor public support, the CGT proposal was abandoned.

17 Apr

The upcoming federal election has people concerned about the future of property investment. How exactly will Labor’s policy changes impact the wealth-creation of investors across Australia?

Should the Australian Labor Party win in the upcoming election, there could be a total of 13 policy changes set to be implemented, according to the Institute of Public Accountants’ Tony Greco.

“We’ve counted up to 13 major policy changes – things that don’t affect property and things that do affect property. They’re all naturally very important,” Mr Greco highlighted.

Among the significant changes in the property investment landscape are the limitations to negative gearing and the capital gains discount.

Labor proposes that negative gearing be limited to new housing starting 1 January 2020. This means that taxpayers can only deduct rental losses against their income if the losses come from newly constructed housing.

15 Apr

I believe gaining the investor mindset and preparing your mettle for becoming the master of your destiny is a conscious decision. Here are six steps to help you get there.

1. Set your barometer

Not everyone wants a bigger boat – in fact, most people don’t even need one.

Step one towards achieving an investor mindset is to set your barometer. It is the key take-off point for your investment journey, and your future self will thank you for making time to define this first.

10 Apr

The growth in the number of loans issued to first-home buyers has given Australia's overall household lending a shot in the arm, figures from the Australian Bureau of Statistics show.

According to the latest ABS report, first-home buyers actively participated in the housing market in February — loans issued to these buyers grew by 1.8%, outpacing the growth in financing issued to non-first-home buyers at 1.6%. Overall, the share of first-home buyers in new home lending figures rose from 26.8% to 27.1%.

Figures also show that the overall lending to households for dwellings grew at a seasonally adjusted pace of 2.7%. This resulted in a rebound in overall household lending, which increased by 2.6%.

New lending for owner-occupier dwellings also contributed to the growth, increasing by 3.4%. At the same time, there was an uptick in household refinancing and investment dwelling loans.