Commercial Vs Residential Property Depreciation

OFTEN INVESTORS considering purchasing an investment property will ask whether a commercial or a residential property will provide them with more deductions in the form of depreciation.

As you'll appreciate, there are many factors an investor needs to be aware of when making their choice between these two investment opportunities. Let's take a look at just some of the differences.

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APRA Cracking Down on Commercial Property Investment Loans

AS MANY INVESTORS would already be aware, borrowing for investing in property has become increasingly difficult over the past 12 months.

And that's because APRA (the banking regulator) has issued a warning to major banks to reduce their exposure to investment property loans.

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Recent Changes to the Lending Environment

THE CURRENT LENDING environment has changed markedly over the last two months with the main developments being:

  1. Lending to foreign investors has been severely restricted or entirely removed by all Australian banks.
  2. Interest Rates have been cut, with the drop passed on for owner-occupied loans and partially passed on for investment loans.
  3. Concerns have been raised about housing oversupply in certain parts of the country, including Melbourne and Sydney, and lenders have placed increased restrictions on higher density developments. 
  4. Some banks have been advised that their loan books are too heavily weighted to property investment (including commercial) and have thus pulled back their lending ratios.
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Federal Budget 2016: You and Your Super

SUPERANNUATION, yes, it's still tax free. However, it comes with changes in that if you have more than $1.6m in superannuation at retirement, the amount over those earnings (not the withdrawals) will not be tax free from July 2017.

Not all bad news, as the bits above $1.6m still receive low concessional tax rates (10 or 15%). And, in most cases, it is far better than being taxed outside of superannuation.

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Reduce Your Fit-out Costs Using Depreciation Deductions

STARTING A NEW business can be quite daunting, particularly if you're trying to do so within a strict budget.

On top of other initial start-up costs, such as purchasing stock or merchandise, arranging insurance, budgeting for staff overheads and (if you don't own the building) allocating funds to pay rent, there are often costs involved in installing assets to fit-out the new space before you can open the doors for business.

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Answers For Commercial Property Investors

MANY OF YOU are now Members and therefore, already receive my Property Briefings podcasts each month. But if you're not, you can simply join here or by clicking on the orange logo above -- because Membership is FREE.

Anyway, I've been regularly receiving requests about providing access to transcripts for the various Episodes -- which number more than 120 so far.

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Negative Gearing Reform

Do Commercial Investors have anything to fear?

WHILE NEGATIVE GEARING is relied upon by investors across various sectors in the Australian economy, it has once again been brought under the spotlight within the context of property investment.

And both sides of politics have shared their positions, where it has been hotly debated over the last few months.

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Renovate and Flourish

MELBOURNE IS WELL KNOWN for its amazing selection of shopping, dining and entertainment. Consequently, more and more commercial property owners have joined the renovating bandwagon to produce popular hotspots for both local residents and those visiting.

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Depreciation: 3 Tips to Know

SURPRISINGLY, most Commercial property owners still remain unaware of their full depreciation entitlements.

In fact, around 80 per cent of commercial property owners don't claim depreciation; and therefore, miss out on thousands of dollars.

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Are We Now Finally Seeing a Retail Revival?

A RECENT ARTICLE in the Financial Review (11 January, page 32) summarised the influx of overseas retailers, who are about to launch new stores within Australia this year.

The key locations being: Melbourne (18), Sydney (10), Brisbane (8) and Perth (4).

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Under the Hammer: The Epidemic of Underquoting

WHILE REAL ESTATE AGENTS (both commercial and residential) must act fairly and honestly when advertising property, there is no doubt that underquoting is a significant problem -- predominantly in the current Melbourne and Sydney real estate market.

Although the New South Wales Government has recently proposed legislative reforms in order combat this problem, Victoria is yet to follow.

What is Underquoting?

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