Hello Friends, Clients & Associates,
Please find the following for your perusal and information with kind regards:-
What new depreciation tax rules mean for property investors
By Mike Mortlock
Friday, 13 July 2012
On June 27, 2012, the ATO withdrew the taxation ruling TR 2011/2. This outlined the effective life of all qualifying plant and equipment depreciating assets. The new and excitingly named TR 2012/2 ruling is in effect from July 1, 2012 and includes some changes to existing depreciating assets and the addition of some new assets. The new legislation applies to all assets acquired individually or through the purchase of a property from the July 1, 2012 onward. If you’ve previously had a tax depreciation schedule prepared, there’s no need to worry about updating any effective lives. In the ATO’s words:
“If, for a particular asset, you were using an effective life from the determination as in force before the latest amendment (for example, as contained in the Schedule to TR 2011/2), you should continue to use that life for that asset.”
The legislation has been updated due to an ongoing review of the commissioner’s effective life determinations, which is being undertaken by the ATO. Specifically, there have been changes to assets under the following descriptions;
- Animal feed manufacturing assets;
- Coffee manufacturing assets;
- Concrete product manufacturing - concrete roof tile manufacturing;
- Concrete product manufacturing - fibre cement building board manufacturing assets;
- Edible oil or fat (blended) manufacturing assets;
- Ethanol manufacturing assets;
- Frozen pre-prepared meals and selected snacks manufacturing assets;
- Health and fitness centre operation assets;
- Motor vehicle manufacturing - automotive metal stamping and blanking assets;
- Motor vehicle manufacturing - motor car engine manufacturing and assembly assets;
- Radio broadcasting assets;
- Steel coil roll forming, slitting, blanking and sheet metal forming assets;
- Sheet metal tank manufacturing assets; and
- Tea manufacturing assets.
This will of course change the depreciation deductions for commercial properties operating under those descriptions, but will not affect residential property investors.
The effective lives affect depreciation deductions by changing the depreciation rates. For example, under the diminishing method, the rate of depreciation for an asset is calculated by 200 divided by the effective life of the asset. So if we take a dishwasher in a residential property as an example, the calculation would be 200 divided by 10 years, giving us a depreciation rate of 20%. If the effective life was to be changed to the same as an oven, the depreciation rate would reduce to 16.7%.
We can expect an updated taxation ruling on effective lives around the end of June each year, due to the ongoing review of effective lives. Hopefully we’ll see the addition of some new assets under the residential property operators’ subsection such as water tanks. We’ll keep you abreast of all legislation changes.
Mike is a director of MCG Quantity Surveyors specializing in tax depreciation deductions for property investors.
&
RP Data Research Blog - Not quite the ‘sardines can’ society: 2011 Census shows average household size remains steady at 2.6 persons per dwelling |
Not quite the ‘sardines can’ society: 2011 Census shows average household size remains steady at 2.6 persons per dwelling Posted: 12 Jul 2012 06:37 PM PDT There was a great deal of speculation before the release of the 2011 Census that the average household size would actually rise across Australia due to the population growing at a faster rate than dwelling construction. The logic was that we might start to see more families under one roof as families look for ways to cope with housing affordability, kids were staying at home longer with mum and dad and the birth rate was on the rise. The results came as a bit of a surprise; the average household size remained steady at 2.6 persons per dwelling; the same average as what was recorded in 2006 and in 2001. Looking at the data, it is clear that several factors have provided some counterbalance that has kept the household size steady. Firstly, the rise in couple families without children (+20.3% between 2011 and 2011), one parent families (+16.8% between 2001 and 2011), lone person households (+16.9% between 2001 and 2011) well and truly grew at a faster pace than couple family with children households (+8.7% between 2001 and 2011). Another reason for the steady average household number can be attributed to the rise in one and two person dwellings. Between the 2001 Census and 2011 Census one person dwelling have increased in number by 16.9% and two person dwellings have increased by 17.5%. In contrast, households with three persons occupying the dwelling have increased by a smaller 13.8% and four person dwellings have increased by 12.9%. A further insight comes from the number of new dwellings which have been constructed. The number of separate houses has increased by 14.0% since the 2001 Census, while unit dwellings have jumped by 26.4% and semi-detached homes such as townhouses have increased in number by 28%. The rise in medium and high density dwellings will have pulled the average household size down. As always though, there are areas that have bucked the trend. The Australian suburb with the highest average household size is Welshpool, located in the Canning council of Western Australia where there are, on average, 7 people per household. While this may seem extreme (and it is!), there are only 17 people living in the suburb of Welshpool and they all live in what the Census glossary describes as ‘A house or flat attached to a shop, office, factory or any other non-residential structure is included in this category’. Considering Welshpool is primarily an industrial suburb, this comes as no surprise. Applying some filters to the data set provides a much more interesting and realistic view on Australia’s household composition. Looking at only those suburbs within the capital cities that have a population of 100 people or more shows the largest average household sizes are located primarily across Sydney’s Western Suburbs. As can be seen in the top 20 table below, the vast majority of suburbs with at least 3.6 persons on average per household are located in the outer suburbs of Sydney.
Inherently, most of the suburbs with a large average household size show a predominance of detached dwellings as opposed to units or semi-detached homes which tend to be smaller and have fewer bedrooms. Once again, no surprises that these areas area also predominantly occupied by families with kids. What came as somewhat of a surprise to me was the fact that overseas migrants don’t seem to play as large a role as previously thought in pushing average household sizes upwards. There was some speculation that the surge in overseas migrants may be another factor pushing household sizes higher under the false logic that many migrant families have larger families. Eight of the 20 suburbs outlined above actually show a proportion of overseas born residents to be lower than the Australian average of 30.2%. From city to city the average household size trends vary slightly. It is interesting to note that the most affordable capital cities (Hobart and Adelaide) appear to have smaller household sizes than the larger capital cites (Hobart and Adelaide both show an average household size of 2.4 persons, the lowest of any capital city). It stands to reason that lower home prices in these cities aren’t driving more people to live under one roof.
Looking at all the suburbs nationally where the average household size is greater than or equal to 4 persons (there are 100 of them) provides another interesting insight about our nations household composition. Of those 100 suburbs where the average household size is 4 persons or more, only 8 have an aboriginal population that is less than 50% of the overall population. It is well documented that aboriginals have larger household sizes and the 2011 Census shows the average household size for households with an aboriginal person have an average size of 3.3 persons compared with the national average of 2.6 persons. Potentially the 2011 Census marks a turning point for household composition in Australia. Although we are likely to see kids staying at home for longer and potentially more persons under one roof in an effort combat housing affordability, in the same sense we are likely to continue to see more lone person households and couples without kids that will drag the average down as well. More families are choosing to live in units and townhomes, once again in an effort to find more affordable housing but also with the aim of living closer to where they work and play. Will the average household size rise over the coming year? We might need to wait until the 2016 Census is delivered to find out.
|
Kind regards
Linda J. Debello LREA
http://www.ljgrealestate.com.au
http:// gillandrealestate.wordpress.com/
http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/
Confidential email:- The information in this message is intended for the recipient name on this email. If you are not the recipient please do not read, copy distribute or act upon the message as the information it contains may be privileged. If you have received this message in error, please notify the writer by return email. Thank you very much for your assistance in this matter and your co-operation.
No comments:
Post a Comment