DOWNSIZING & MORE ABOUT THE PROHIBITIVE COSTS OF DOWNSIZING BESIDES STAMP DUTY!

Research shows most seniors are emotionally attached to their home.

 

DOWNSIZING & MORE ABOUT THE PROHIBITIVE COSTS OF DOWNSIZING BESIDES STAMP DUTY!

CAAN … on further thoughts about “How to Encourage Seniors to Downsize” … we recommend you think about these!

https://www.macrobusiness.com.au/2017/05/encourage-seniors-downsize/

The article said itself ‘downsizing’ is not driven or avoided by:

-stamp duty
-loss of benefits

It is about needing a more suitable residence, that the family home is too much to look after due to:

-ageing/health issues
-costs
-relationship changes
-loss of partner

Most stay as long as possible, yes it is an emotional issue, something it seems these

ADVOCATES OF SQUEEZING OUT OWNERS OF DETACHED DWELLINGS in desirable areas are incapable of understanding.

The keenness that a cabal of interest groups have in promoting downsizing, and a broad based LAND TAX is alarming. Why has this emerged?

Could it be:

-they believe it demonstrates they are up to the task, showing government and others they are literally on the money, they have got the ideas

Or:

-are they desperate to come up with ideas that will funnel more housing into the grasp of developers

However:

-owing to compulsory superannuation more retirees are ‘self funded’, they don’t qualify for any government pension so the loss of benefits is irrelevant

MORE COSTS are involved in selling and buying (besides stamp duty) than acknowledged, and they are a real disincentive to relocating, just think about the costs of:

.inspections
.agents fees
.legal fees
.removalists
.fixing up the home for selling
.even small changes to the new home
.increased transport costs
.having the cash on hand to pay utility costs, insurance, levies and so on…

What about the fact that to downsize it will mean:

-moving away from the location enjoyed for sometime, and
-given the cost of metropolitan living it is unlikely not much money will be left in the coffers of those downsizing; there’s not going to be that lump of cash to be put into SUPER!

These ideas need to be called out for what they are … if they look like pig, smell like a pig and feel like a pig well then they must be a …

WE suggest perhaps this Think Tank are peddling a myth, or worse still they are building a belief that they want to be true … and if they bang hard enough some – especially those with the levers in their hands – might then allow it to happen, never mind the consequences!

WHAT FORCING SENIORS TO DOWNSIZE REALLY MEANS ….

-opening up another avenue for developers to landbank, demolish and redevelop to sell more “new homes” to foreign buyers … because the supply cannot meet the foreign demand!

SOME FACTS …

-that the Housing Affordability Crisis locking out a whole Cohort of Aus tralian First Home Buyers is due to LNP Government policies, it would seem have been written by the Developer Lobby!

-the 100% sell off of “new homes” to foreign buyers (FIRB ruling change)

-our suburbs have been rezoned for “Higher Density” both high-rise and medium density

-the inflated value of homes is due to the influx of black foreign money in our real estate

VIEW CAAN Facts Sheet for how the Housing Affordability Crisis was contrived!

 

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HOW TO ENCOURAGE SENIORS TO DOWNSIZE

 

HOW TO ENCOURAGE SENIORS TO DOWNSIZE …

An Analysis of the Report of the Grattan Institute “Why Australians Don’t Downsize … ” May 2017

Conclusion: “If they’re serious about making it easier for young Australians to buy a home, they will have to make tougher policy choices.”

CAAN:

-by enforcing the AML Legislation for the Real Estate Sector (the second tranche)

.to eliminate money laundering in Australian Real Estate
.to eliminate the Proxy onshore foreign buyer’s agent laundering the black cash and avoiding the higher stamp duty, fees and charges

-remove the 50/100% sell off of “new homes” to overseas buyers (FIRB rule changes)
.giving preference to foreign buyers particularly in China over a whole Cohort of Australian First Home Buyers

-put a stop to VISA manipulation on buying Australian real estate they gain a Residency Visa

.stop with the Guardianship Visa, Student Visas and Investor Stream

VIEW: https://www.macrobusiness.com.au/2017/05/encourage-seniors-downsize/

Macro Business By Guest in Australian budget
May 8, 2017

Encouraging senior Australians to downsize their homes is one of the more popular ideas

http://insidestory.org.au/options-for-housing-affordability-the-good-the-bad-and-the-cosmetic/

To make housing more affordable. The trouble is, incentives for downsizing would hit the budget, but make little difference to housing affordability.

It sounds good: new incentives would encourage seniors to move to housing that better suits their needs, while freeing up equity for their retirement and larger homes for younger families.

But the reality is different. Research shows most seniors are emotionally attached to their home and neighbourhood and don’t want to downsize.

When people do downsize, financial incentives are generally not the big things on their minds. And so most of the budget’s financial incentives will go to those who were going to downsize anyway.

Financial barriers to downsizing

There are three financial hurdles to downsizing. Downsizers risk losing some or all of their Age Pension, because the family home is exempt from the pension assets test, but any home equity unlocked by downsizing is not.

Downsizers also have to stump up the stamp duty on any new home they buy. For a senior purchasing the median-priced home in Sydney that’s now A$32,000. Finally earnings from the cash released are taxed, whereas capital gains on the home are not.

The Turnbull government has flagged the possibility of financial incentives in next week’s federal budget for superannuants and pensioners to downsize their home.

One proposal would exempt downsizers from the A$1.6 million cap on super balances eligible for tax-free earnings in retirement, or from the A$100,000 annual cap on post-tax contributions. But this would benefit only the very wealthiest retirees – just 60,000 retirees have super fund balances exceeding A$1.6 million.

More seniors would benefit from a proposal to exempt them from stamp duty when purchasing a smaller home. And many would benefit from a Property Council proposal to quarantine some portion of the proceeds from the pension assets test for up to a decade.

The trouble with all these proposals is that they would hit the budget – because everyone who downsized would get the benefits – but they would not encourage many more seniors to downsize.

Staying – or downsizing – is seldom about the money

Research shows that for two-thirds of older Australians, the desire to “age in place” is the most important reason for not selling the family home. Often they stay put because they can’t find suitable housing in the same local area.

In established suburbs where many seniors live, there are relatively few smaller dwellings because planning laws restrict subdivision. And even if the new house is next door, there’s an emotional cost to leaving a long-standing home, and to packing and moving.

And so, few older Australians downsize their home. According to the Productivity Commission, about 20% aged 60 or over have sold their home and purchased a less expensive one since turning 50. Another 15% have “strong intentions” to do so in the future.

When older Australians do downsize, their decision is dominated by non-financial considerations, such as a preference for a different style of house and living, a concern that it is getting too hard to maintain the house and garden, or the loss of a partner.

These emotional factors typically dwarf financial considerations. According to surveys, no more than 15% of downsizers are motivated by financial gain. Stamp duty costs were a barrier for only about 5% of those thinking of downsizing. Only 1% of seniors listed the impact on their pension as their main reason for not downsizing.

There are better and cheaper ways to encourage seniors to downsize
If governments do want to use financial incentives to encourage downsizing, budget sticks would be cheaper and fairer than budget carrots. Even if they have little effect on downsizing rates, at least they would contribute to much-needed budget repair and economic growth.

The federal government should include the value of the family home above some threshold – such as A$500,000 – in the Age Pension assets test. This would encourage a few more seniors to downsize. More importantly, it would make pension arrangements fairer, and contribute up to A$7 billion a year to the budget.

Asset-rich, income-poor retirees could continue to receive a full pension by borrowing against the value of the home until the house is sold. The federal government would then recover the cost from the proceeds of the sale. If well designed, this scheme would have almost no effect on retirees – instead it would primarily reduce inheritances.

State governments should abolish stamp duties on property, and replace them with a general property tax, as the ACT Government is doing. This would encourage downsizing, although only at the margins.

But the real policy justification is that it would help working age households to take a better job that’s only accessible by moving house, and so improve economic growth. It’s a big prize: a national shift from stamp duties to broad-based property taxes could add up to A$9 billion a year to the economy.

In short, the downsizing debate is a prime example of how governments prefer politically easy options with cosmetic appeal, but little real effect, on housing affordability. If they’re serious about making it easier for young Australians to buy a home, they will have to make tougher policy choices.

Article by Brendan Coates and John Daley from the Grattan Institute

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DOWNSIZING AND WHY AUSTRALIANS DON’T DO IT, AND THE LIMITS TO WHAT THE GOVERNMENT CAN DO!

 

DOWNSIZING AND WHY AUSTRALIANS DON’T DO IT, AND THE LIMITS TO WHAT THE
GOVERNMENT CAN DO!

MAY 2017

THIS opinion piece reflects the sort of LNP philosophy that leaves a bad taste in one’s mouth!

Recommending taxing elderly people to force them out of their homes that they worked 40 or more years to pay for!

Targeting them as “Asset Rich” is this in an attempt to create resentment from Millennials locked out of home ownership through sinister LNP Government policies?

For example “budget sticks” rather than carrots!

“The Federal Government should include the value of the family home above some threshold — such as $500,000 — in the age pension assets test” … the price of a one bedroom unit in Sydney …

“Asset-rich, income-poor retirees could continue to receive a full pension by borrowing against the value of the home until the house is sold.”

AND THIS ONE!

” … primarily reduce inheritances” this following the LNP locking out a whole Cohort of Australians from home ownership

KEYPOINTS:

-downsizers risk losing some or all of their age pension; though the family home is exempt from the pension assets test any home equity unlocked by downsizing is not

-downsizers have to stump up the stamp duty on any new home they buy; at May 2017 equates to $32,000 for the median-priced home in Sydney

-earnings from the cash released are taxed, whereas capital gains on the home are not

Downsizing: Why Australians don’t do it, and the limits to what the Government can do!

http://mobile.abc.net.au/news/2017-05-05/housing-why-australians-dont-downsize-and-what-the-govt-can-do/8500170?pfmredir=sm

OPINION THE CONVERSATION BY BRENDAN COATES AND JOHN DALEY, GRATTAN INSTITUTE

FRI 5 MAY 2017

A house for sale seen in Canberra

PHOTO Decisions about downsizing are often driven by emotional, not financial, considerations.

AAP: LUKAS COCH

Encouraging senior Australians to downsize their homes is one of the more popular ideas to make housing more affordable.

The trouble is, incentives for downsizing would hit the budget, but make little difference to housing affordability.

It sounds good: new incentives would encourage seniors to move to housing that better suits their needs, while freeing up equity for their retirement and larger homes for younger families.

But the reality is different.

Research shows most seniors are emotionally attached to their home and neighbourhood and don’t want to downsize.

When people do downsize, financial incentives are generally not the big things on their minds.

And so most of the budget’s financial incentives will go to those who were going to downsize anyway.

Financial barriers to downsizing
There are three financial hurdles to downsizing.

Downsizers risk losing some or all of their age pension, because the family home is exempt from the pension assets test, but any home equity unlocked by downsizing is not.

Downsizers also have to stump up the stamp duty on any new home they buy.

For a senior purchasing the median-priced home in Sydney, that’s now $32,000.

Selling the family home

Gerry and Rosemary Franklin made the tough decision to move into retirement accommodation after living in their family home for almost half a century.
Finally, earnings from the cash released are taxed, whereas capital gains on the home are not.

The Turnbull Government has flagged the possibility of financial incentives in next week’s federal budget for superannuants and pensioners to downsize their home.

One proposal would exempt downsizers from the $1.6 million cap on super balances eligible for tax-free earnings in retirement, or from the $100,000 annual cap on post-tax contributions.

But this would benefit only the very wealthiest retirees — just 60,000 retirees have super fund balances exceeding $1.6 million.

More seniors would benefit from a proposal to exempt them from stamp duty when purchasing a smaller home.

And many would benefit from a Property Council proposal to quarantine some portion of the proceeds from the pension assets test for up to a decade.

The trouble with all these proposals is that they would hit the budget — because everyone who downsized would get the benefits — but they would not encourage many more seniors to downsize.

Staying — or downsizing — seldom about the money
Research shows that for two-thirds of older Australians, the desire to “age in place” is the most important reason for not selling the family home.

Often they stay put because they can’t find suitable housing in the same local area.

In established suburbs where many seniors live, there are relatively few smaller dwellings because planning laws restrict subdivision.

And even if the new house is next door, there’s an emotional cost to leaving a long-standing home, and to packing and moving.

And so, few older Australians downsize their home.

According to the Productivity Commission, about 20 per cent of people aged 60 or over have sold their home and purchased a less expensive one since turning 50.

Another 15 per cent have “strong intentions” to do so in the future.

When older Australians do downsize, their decision is dominated by non-financial considerations, such as a preference for a different style of house and living, a concern that it is getting too hard to maintain the house and garden, or the loss of a partner.

These emotional factors typically dwarf financial considerations. According to surveys, no more than 15 per cent of downsizers are motivated by financial gain.

Stamp duty costs were a barrier for only about 5 per cent of those thinking of downsizing.

Only 1 per cent of seniors listed the impact on their pension as their main reason for not downsizing.

Better and cheaper ways to encourage downsizing
If governments do want to use financial incentives to encourage downsizing, budget sticks would be cheaper and fairer than budget carrots.

Even if they have little effect on downsizing rates, at least they would contribute to much-needed budget repair and economic growth.

The Federal Government should include the value of the family home above some threshold — such as $500,000 — in the age pension assets test.

This would encourage a few more seniors to downsize.

More importantly, it would make pension arrangements fairer, and contribute up to $7 billion a year to the budget.

Asset-rich, income-poor retirees could continue to receive a full pension by borrowing against the value of the home until the house is sold.

The Federal Government would then recover the cost from the proceeds of the sale.

If well designed, this scheme would have almost no effect on retirees — instead it would primarily reduce inheritances.

State governments should abolish stamp duties on property, and replace them with a general property tax, as the ACT Government is doing.

This would encourage downsizing, although only at the margins.

But the real policy justification is that it would help working age households to take a better job that’s only accessible by moving house, and so improve economic growth.

It’s a big prize: a national shift from stamp duties to broad-based property taxes could add up to $9 billion a year to the economy.

In short, the downsizing debate is a prime example of how governments prefer politically easy options with cosmetic appeal, but little real effect, on housing affordability.

If they’re serious about making it easier for young Australians to buy a home, they will have to make tougher policy choices.

Brendan Coates is a fellow at the Grattan Institute.

John Daley is CEO of the Grattan Institute.

Originally published in The Conversation:

https://theconversation.com/why-older-australians-dont-downsize-and-the-limits-to-what-the-government-can-do-about-it-76931

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SECRET REPORT WARNED TOP BUREAUCRATS TO DELAY NEW RAIL TIMETABLE … Epping to Chatswood and Bankstown Line

Patronage on Sydney's train network has surged over the past year.

 

 

SECRET REPORT WARNED TOP BUREAUCRATS TO DELAY NEW RAIL TIMETABLE RE EPPING TO CHATSWOOD AND BANKSTOWN LINE

CAAN has been notified that the full version that is available online was not printed in the hard copy!

There are a few paragraphs missing from the printed version.

PHOTO … The last paragraph on-line shared here is a doozy.

If this is correct, not only less seats, but the article describes a ‘slower metro-type service’
The very last sentence would seem to indicate they intend to spin and feed us weasel words, and an advertising campaign (“needs to be ‘headed off’ by communications in the very near future”.)

SUPPLIED HERE A COPY OF THE ONLINE VERSION AT 20 APRIL 2018

SECRET REPORT WARNED TOP BUREAUCRATS TO DELAY NEW RAIL TIMETABLE

https://www.smh.com.au/national/nsw/secret-report-warned-top-bureaucrats-to-delay-new-rail-timetable-20180417-p4za20.html

EXCLUSIVE NATIONAL NSW PUBLIC TRANSPORT

Secret report warned top bureaucrats to delay new rail timetable

By Matt O’Sullivan 18 April 2018 — 6:30pm

The state’s top transport officials were warned to delay the recent timetable changes for Sydney’s stretched rail network until early this year after independent experts found “simply too many underlying issues which have not been fixed”, a high-level report reveals.

The “sensitive” report, obtained by the Herald using freedom of information laws, also details tensions and resentment between transport agencies, and an unwillingness to relay information to mid-level managers for fear of “politically-difficult leaks”.

Sydney’s rail network suffered widespread delays and cancellations to services in Janaury.

Photo: Louie Douvis
Despite the warnings, the new timetable was introduced on November 26, and later partly blamed for widespread delays and cancellations on Sydney’s rail network in December and January. Sydney Trains has since cut some train services to make the timetable more reliable.

The UK consultants who wrote the report were commissioned by Transport for NSW to assess plans to introduce the new timetable as early as October last year and rate its chance of success.

Following their investigation, they urged senior officials to delay it by several months until early this year due to a “substantial risk of failing to deliver the level of performance which the public will expect”.

Their report warned there was “little room” for rail systems or obsolete equipment, such as signalling, to fail before the “service might disintegrate substantially”, especially during the afternoon peak. This is, in effect, what occurred.

The final report by London’s Railway Consultancy was handed to Transport for NSW in March last year. As well as citing concerns about the practical difficulties of the timetable, the report reveals divides and communication gaps within and between transport agencies.

The report reveals ‘resentment and unhappiness” at Sydney Trains towards the lead agency, Transport for NSW.

Photo: Ryan Stuart

One was an unwillingness by Sydney Trains’ senior management to pass on “sufficient detail” to middle managers.

“One of the reasons for this is political concern about bad publicity which might emanate from the identification of ′losers’ (passenger journeys likely to get worse),” the report says.

“However, the confidentiality imperative (to avoid politically-difficult leaks) has unfortunately led to insufficient consultation during the process, and the ability of other rail staff to contribute to, or challenge, the timetable development.”

RELATED ARTICLE

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The report also raised concerns that “political worries about particular groups of passengers being disadvantaged” limited the amount of information shared between the lead agency, Transport for NSW, and Sydney Trains.

A second concern was the relationship between Transport for NSW and Sydney Trains. Much of the detailed planning for the new timetable occurred within Transport for NSW’s rail service delivery office, which employs more than 100 people, rather than Sydney Trains. This led to tensions between planners at the two agencies.

The confidentiality imperative (to avoid politically-difficult leaks) has unfortunately led to insufficient consultation.

The report by London’s Railway Consultancy for Transport for NSW
There was “certainly some resentment and unhappiness” at Sydney Trains, the report said. This could have been due to poaching of staff by Transport for NSW, as well as people who were previously at a higher level “now seemingly on the receiving end of instructions”.

But Sydney Trains executive director Tony Eid said the report was outdated and written about an early draft of the timetable, which went through nine further drafts before final implementation.

“While we didn’t agree with everything the report said, it helped us identify a number of actions that were closed out before the timetable was implemented,” he said in a statement.

Mr Eid said the timetable was pushed back by six weeks from last October, and both Sydney Trains and Transport for NSW agreed a start date in November was the best option.

“There were no issues that stopped Transport for NSW and Sydney Trains working together effectively,” he said. “Any suggestion otherwise is simply wrong.”

In relation to the timetable, the report’s authors found that “there clearly are concerns about the probability of its success”, cautioning that “matters can turn nasty very quickly in the political environment and may be irrecoverable for many years”.

“Unsuccessful timetables are remembered, and this one cannot afford to fail,” they wrote.

“We believe there to be a wide range of operating consequences which will be barely satisfactory, leaving [Sydney Trains and Transport for NSW] at the mercy of equipment failures, random incidents, adverse passenger comment and political interference.”

An internal document reveals that delays to Sydney’s trains are likely to be “cumulative and irrecoverable” during peak hours following incidents.

Leaked documents have previously revealed that Sydney Trains warned before the timetable was introduced that delays were likely to be “cumulative and irrecoverable” during peak periods following incidents.

Sydney Trains’ key indicator of success is the percentage of trains arriving within five minutes of scheduled times. That emphasis on punctuality, the British experts said, could lead to “services being planned and operated without due consideration of a rail service which passengers are known to find important” such as journey times.

They recommended senior managers improve the “KPI system so that railway management address a wider range of outcomes rather than just ‘% on time’”.

RELATED ARTICLE

Patronage on Sydney’s train network has surged over the past year.
Revealed: Sydney Trains warns timetable overhaul to make peak-hour delays ‘irrecoverable’

The timetable will undergo further changes ahead of the closure of the Epping-to-Chatswood line on September 30 for seven months, when it will be converted to carry single-deck metro trains as part of a $20 billion-plus project. Next year, temporary closures of the Bankstown line will also begin to allow for construction of a metro line from Sydenham to Bankstown.

In their report, the British consultants did warn that a “more complex stopping pattern” at stations under the new timetable for trains on the Bankstown line, “before then migrating to a higher frequency/slower metro-type service, is rather illogical”. They said local and political opposition to “metroising” the Bankstown line could turn into disapproval of the new timetable, and “needs to be ‘headed off’ by communications in the very near future”.

Matt O’Sullivan

Matt O’Sullivan is the Transport Reporter for The Sydney Morning Herald.

 

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SYDNEY IS GROWING … HOW HAS THIS BEEN CONTRIVED … FACTS SHEET FOR FIRST HOME BUYERS TO FIGHT BACK!

 

Image may contain: sky and outdoor

 

SYDNEY IS GROWING … HOW HAS THIS BEEN CONTRIVED … FACTS SHEET FOR FIRST HOME BUYERS TO FIGHT BACK!

YOU can see it happening before your eyes BUT you need the Facts to disarm the Xeno slur, the racist accusations … because this awful predicament has been created by our own Government Policies!

-why First Home Buyers are priced out of the property market?
-why schools, hospitals, buses, trains are full up?
-why all over Sydney we sit in gridlock & not just in peak hour?
-why cranes are on the horizon in every direction yet the pollies say we need more supply?

WE all need to speak up! Take Action Before We Lose What Is Ours!

COMMUNITY ACTION ALLIANCE FOR NSW (CAAN) FACT SHEET

YOU may want to scroll down to view the headings here to look at what concerns you most! Then click the links to find out more.

IF you feel intimidated this document may help you to express your concerns publicly.

CHINESE BUY 1 IN 4 NEW PROPERTIES IN NSW: Credit Suisse

View for Chart revealing 87% of foreign purchases by Chinese

However, the actual percentage is indeterminate with Proxy purchase!

ALSO VIEW this article in “Foreign Property Buyers including Chinese”
Website Category.

http://www.afr.com/real-estate/chinese-buy-1-in-4-new-properties-in-nsw-credit-suisse-20171010-gyy7nd?&utm_source=social&utm_medium=facebook&utm_campaign=nc&eid=socialn%3Afac-14omn0053-optim-nnn%3Anonpaid-25%2F06%2F2014-social_traffic-all-organicpost-nnn-afr-o&campaign_code=nocode&promote_channel=social_facebook

 

THE GREAT AUSTRALIAN HOUSING BUBBLE & GOVERNMENT INACTION

Most of the price growth has occurred under LNP Governments not the ALP

Posted by Community Action Alliance for NSW on Friday, May 26, 2017

BUYERS AGENTS, SYNDICATES & PROPERTY INVESTOR ALLIANCE TOGETHER EXPEDITE THE DEMAND FOR AUSSIE HOMES

The key points on how First Home Buyers (FHBs) have been locked out because there are no laws to prevent foreign buyers purchasing land in Australia.

AUSTRAC advised Four Corners foreign investors/buyers use relatives to set up Shell Corporations!

Posted by Community Action Alliance for NSW on Monday, May 8, 2017

VISAS

Including Guardian and Investor Stream.

The Guardian Visa is a new Visa system which has opened the door to International Primary School Students as young as 6 years old and their guardian to each buy several new properties or one existing property.

The Investor Stream Visa on the purchase of property valued at $1.5M to gain a Residency Visa.

Posted by Community Action Alliance for NSW on Thursday, May 4, 2017

PROXY … THE ONSHORE FOREIGN PROPERTY BUYERS AGENT

View the report from Investigative Journalist Michael West: “The Wall of Chinese Capital buying up Australian Properties” … this will not ease up until the Government introduces the second tranche of the Anti-Money Laundering Legislation.

Scroll down for more!

Posted by Community Action Alliance for NSW on Tuesday, April 25, 2017

BLACK MONEY … MONEY LAUNDERING … IN AUSTRALIAN REAL ESTATE

ALSO VIEW “BLACK MONEY; MONEY LAUNDERING IN AUSTRALIAN REAL ESTATE” WEBSITE CATEGORY  to find more!

View here for numerous reports including those from Andrew Heaton “Is Australian Real Estate a Haven for Money Laundering”;

Investigative Journalist Michael West “House Prices Surge on China Black Money; Authorities Dither;

Macro Business “Australian Federal Parliament Complicit in Property Money Laundering” …

Scroll down for more from others including Transparency International!

Posted by Community Action Alliance for NSW on Saturday, March 4, 2017

WHAT THE POLLIES ARE NOT TELLING YOU … ABOUT FOREIGN OWNERSHIP OF NEW DWELLINGS …  THE FIRB RULING CHANGE …

Foreign ownership of new built homes was increased from 50% to 100% at the behest of the Lobby Group of Developers in 2008/09.

This was allegedly in order for them to gain finance to build. However this racket has been ongoing since 2009 to date. The Treasurer announced in the May 2017 Budget that it would be reduced back to 50%.

However what was not widely reported was that 50% reduction only applied to developments of 50 units or more … a sleight of hand.

-it does not apply to developments already approved

-it is easily overcome with 50% sell-off the plan and 50% purchase of any development through a Proxy; Buyers Agent; Syndicate; Investor Alliance

-developers can also alter projects to consist of 49 dwellings or less

-ties in with the Medium Density Housing Code of duplex, townhouses, manor homes and terraces (10 per 600M2 lot)

Posted by Community Action Alliance for NSW on Friday, February 17, 2017

THE IMPACT OF A BIG AUSTRALIA … “THE STING” (reducing lot sizes for higher density)

Posted by Community Action Alliance for NSW on Friday, August 5, 2016

The Plan and in fact what they have pulled off is the rezoning of where we live in Sydney! With the reduction of Lot Sizes as little as 280 – 300 M2 to enable higher density throughout Sydney, and across NSW!

All part of “A Plan to Grow Sydney” to be further implemented by the Greater Sydney Commission (the GSC) with Lucy Turnbull (the PM’s wife) at the helm.

Could this be the biggest Con of them all?

The talk that is put about by the GSC is that they want to activate Boomers to downsize in order to create more “affordable housing” … but that obviously is B.S. because it is not affordable housing for Aussie First Home Buyers it is about inflating the “new housing market” to cater for the foreign buyers 100%.

Not only are our suburbs, quality of life, urban bushlands, heritage and communities being destroyed by the high-rise slums but now they plan to create higher density by development of as many as 10 terraces on a SUBURBAN 600M2 lot!

BOOMERS … the Best Thing you can Do … is Not Sell! Try and Keep the Family Home for Your Family …

-so that in the future they can own a piece of Australia
-ensure the job market is there for young Australians
-and not lose out to foreign ownership

FOR explanation of this “CON” view: “New Housing Plan to Put Medium Density Developments on Residential Lot Almost Anywhere in NSW”

http://www.dailytelegraph.com.au/newslocal/the-hills/new-housing-plan-to-put-mediumdensity-developments-on-residential-lots-almost-anywhere-in-nsw/news-story/a5568610188d6cd584b2ee5c5c78c79f

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CHINESE BUY 1 IN 4 NEW PROPERTIES IN NSW: CREDIT SUISSE

Buyers inspecting plans at the launch of  an apartment block in Epping last year.

 

CHINESE BUY 1 IN 4 NEW PROPERTIES IN NSW: CREDIT SUISSE

CHINA represents 87 per cent of foreign property buyers in NSW: January to June 2017

Buyers inspecting plans at the launch of an apartment block in Epping last year. Fiona Morris

by Nick Lenaghan

Foreign buyers, almost all of them Chinese, are buying the equivalent of 25 per cent of new housing supply in NSW, undeterred by local taxes or investment limits imposed in China.

Credit Suisse’s Hasan Tevfik and Peter Liu have forecast a “stronger-for-longer” scenario for the housing sector after analysing foreign buyer receipts collected in NSW, Victoria and Brisbane.

The trend is strong in Victoria as well, with foreign buyers accounting for the equivalent of 17 per cent of new housing. In Queensland, it is 8 per cent.

“Almost 90 per cent of foreign demand is from China and there is little evidence that new capital controls by the Chinese authorities, announced in December 2016, have slowed demand for Aussie housing,” the analysts wrote in a report released overnight.

“We think the tailwind of Chinese wealth creation will mean more, not less, foreign buying of Aussie housing.

In Sydney, house prices fell by 0.1 per cent over September, the first fall since late 2015. New dwelling approvals have also been sluggish.

In their report ‘Build it and they will come’, the Credit Suisse strategists expect the moderation in housing activity and house price inflation to continue.

“But Chinese demand suggests we ought to remain skeptical of a collapse,” they wrote.

“Residential exposed companies should benefit including the developers, building material companies and banks.”

Following an initial report in March this year, and using Freedom of Information requests the Credit Suisse report collates tax receipts collected by the state revenue offices in the three states over the 2016-17 financial year.

It found foreign buyers are pouring an annualised $5.9 billion into residential property in NSW, $3.4 billion in Victoria and $700 million in Queensland.

That investment is just a tiny fraction of the national housing market, worth $6.7 trillion, or $5.6 trillion in the three east coast states. However, the report notes, it represents a large proportion of the value of new housing supply.

 

While the Chinese dominate overall foreign demand, it is Americans who spend the most on each property, with an average purchase price in Sydney of $1.7 million, according to Credit Suisse. Indians spend the least, averaging less than $400,000.

From July 1 this year, NSW doubled the stamp duty on foreign buyers to 8 per cent and increased the land tax surcharge from 0.75 per cent to 2 per cent.

Along with stamp duty and a federal fee, a foreign buyer is saddled with a 12 per cent tax burden before they can take possession of their property.”Will the most recent increase in tax be enough for her to reconsider and cause house prices in Sydney to decline? International experience so far suggests not,” the Credit Suisse analysts wrote.

Victoria and Queensland also impose taxes on foreign buyers of residential property of 7 per cent and 3 per cent, respectively.

 

The prospect of higher surcharges on foreign buyers, along with the further depreciation of the renminbi – thereby making Australian housing less cheap compared to the cost of Chinese apartments – represent risks to Chinese demand for real estate here.

Offsetting these risks, in the Credit Suisse view, is the “tailwind of Chinese wealth creation”. Chinese millionaires account for much of the real estate buying in Australia.

Six years ago, their wealth would have covered 1.2 times the Australian housing market. Now it covers two times the value of local housing.

“As our property market becomes more global perhaps we should be concentrating less on Australian incomes as a measure of buying power and more on wealth creation in the Asian region,” the analysts wrote.

All this is good news for major developers such as Lendlease, Stockland and Mirvac, the report noted.

The big four banks also have exposure to the residential market, along with building materials companies such as Boral,BlueScope Steel, Dulux, CSR and Adelaide Brighton.

Credit Suisse have added Fletcher Building to their Long portfolio and also cite property websites REA Group and Fairfax Media, the publisher of The Australian Financial Review.

“The foreign buyer has never before been as an important driver of the Australian housing market as she is now,” the analysts wrote.

“We forecast these flows to continue at a strong pace and will serve to cushion the downside in activity and prices.”

SOURCE:   http://www.afr.com/real-estate/chinese-buy-1-in-4-new-properties-in-nsw-credit-suisse-20171010-gyy7nd?&utm_source=social&utm_medium=facebook&utm_campaign=nc&eid=socialn%3Afac-14omn0053-optim-nnn%3Anonpaid-25%2F06%2F2014-social_traffic-all-organicpost-nnn-afr-o&campaign_code=nocode&promote_channel=social_facebook
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EXPLAINER: WHAT IS ‘VALUE CAPTURE’ AND WHAT DOES IT MEAN FOR CITIES?

 

THE CONVERSATION:  EXPLAINER: WHAT IS ‘VALUE CAPTURE’ AND WHAT DOES IT MEAN FOR CITIES?

June 22, 2016

Transit value capture is used in Hong Kong. Flickr/Kin, CC BY

Authors

Nicole Gurran
Professor – Urban and Regional Planning, University of Sydney

Stewart Lawler
Lecturer in Property and Built Environment, University of Sydney

Disclosure statement

Nicole Gurran receives funding from the Australian Housing and Urban Research Institute (AHURI).

Stewart Lawler does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Partners
University of Sydney

University of Sydney provides funding as a member of The Conversation AU.

Value capture secures some of the benefits delivered by public investment to offset the costs of provision. The notion has been around in various forms for a while, but recently gained steam. Prime Minister’s Malcolm Turnbull’s Smart Cities Plan touts value capture as a way to better distribute “the costs and benefits in publicly funded infrastructure to facilitate a project that may not otherwise occur”.

But there’s a lot of confusion about what value capture actually means and how it might operate in Australia.

What is ‘value capture’?

Public investment in a new rail line or motorway can generate huge increases in surrounding land values. In part the increase derives from improved accessibility for existing residents and businesses. High windfalls also arise once land has been rezoned to capitalise on higher development opportunities generated by the new infrastructure.

Since public investments and decisions are intended to maximise community benefit, it seems unfair and inefficient that some private landowners profit immensely from the process while others gain little or may even be disadvantaged.

Value capture mechanisms seek to rectify this by clawing back at least some of the increased business revenue or land value. These funds are then allocated towards the initial costs of infrastructure provision. In the case of a planning change, land value uplift can also help ensure that affordable housing for low income groups is included in new development.

How does value capture work?

The PM’s Smart Cities Plan doesn’t offer much detail as to how a value capture model would operate in Australia. Several different approaches are used overseas, but their potential transferability is unclear.

Transit value capture is used in Hong Kong and Japan to fund railway lines and new town development. This is a project-based approach which packages investment in railway and housing development together. Commercial holdings along the railway line deliver an ongoing revenue stream as does long term investment in residential development. In Hong Kong, a significant program of public rental and subsidised home ownership has also been delivered as part of this model.

Project-based transit value depends on access to large swathes of low cost land (in Hong Kong the government retains land ownership, so the land component is essentially free). It also depends on ongoing residential and commercial investment along the new route over time, which in turn assumes buoyant economic growth. When the Japanese economy stagnated, the potential for railway operators to self-finance their projects did too.

Tax Increment Financing (TIF) is used widely in the US to finance new transit and urban renewal projects. The model draws on anticipated increases in business revenue or rents in areas where incremental value uplift will occur. A portion of the increase is captured via a special property tax which is then allocated to repay the debt.

Australian local governments can also introduce special purpose levies to fund specific items through property taxes or rates. The Gold Coast light rail project for instance, was partly financed via the council’s annual transport levy (now around $111). However, since the levy applies to all ratepayers, rather than confined to areas where direct value uplift occurred, this doesn’t represent value capture in the strict sense of the term.

Value capture through the planning process is another approach. Unlike development contributions, which in Australia are used to internalise the costs of servicing a particular project (like roads, carparks, or footpaths), so they aren’t borne by existing ratepayers, value capture focuses on the benefits (often called “betterment” or “planning gain”) accruing from public investment or planning decisions.

One way of capturing value created through public investment or planning is to levy the charge on the first property transaction (ie. land sale) following the change. Another is to add an additional levy to existing contributions paid by developers.

The NSW government’s foreshadowed “Special Infrastructure Contribution” for new residential development along the Parramatta Rd light rail corridor ($200 per metre of gross floor area) is a recent example.

While this amounts to around $20,000 an apartment (at most about 3% of current sales prices), industry lobby group the Urban Taskforce claim the levy will discourage development and hurt home buyers. That’s cheeky since house prices are set by the market – which in the case of a light rail corridor will rise by much more than 3%. Ultimately the Taskforce worries that value capture places “an unfair burden on particular sectors of society” by which they presumably mean landowners and developers.

What would need to happen to extend value capture models in Australia?
Besides the politics, a number of issues must be addressed if value capture is to be extended in Australia. First, calculating value uplift is complex. Often land prices rise well in anticipation of investment or a planning change, so robust framework for value capture should be in place well before such speculation might occur.

Second, value capture should not discourage development or make land acquisition more expensive. This means close attention to project viability when setting capture requirements. Third, robust mechanisms for collection through either the planning process, as an ongoing property tax, or when land is sold, are needed.

Finally, although the current conversation focuses on transport, over time there will be pressure to fund other socially beneficial infrastructure. Two obvious candidates are schools, which also improve land values, or affordable housing, which is often lost when land values rise.

However fuzzy current conversations about value capture may be, the Commonwealth’s new interest in cities and the need to support more affordable homes near public transport, is welcome. So too the recognition that public investment and policy changes in urban and regional areas generate enormous value, which can and should be shared more widely.

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SOURCE:   https://theconversation.com/explainer-what-is-value-capture-and-what-does-it-mean-for-cities-58776

 

COMPULSORY ACQUISITION … SYDNEY METRO ACCUSED OF UNFAIR PRESSURE TACTICS

 

 

COMPULSORY ACQUISITION … SYDNEY METRO ACCUSED OF UNFAIR PRESSURE TACTICS

https://www.smh.com.au/national/nsw/compulsory-acquisition-sydney-metro-accused-of-unfair-pressure-tactics-20161028-gscowk.html

By Sean Nicholls
Updated 29 October 2016

At 53, Con Passas wasn’t anticipating having to move home any time soon after buying his apartment and business in the same block on Botany Road in Waterloo in 2010 and 2011.

But then along came stage two of the $12 billion Sydney Metro rail line.

When he first learned his properties were to be acquired for the project, Mr Passas immediately thought of the controversy over forced acquisitions for the $16.8 billion WestConnex motorway.

Con Passas lives and works at Waterloo.

“We saw the bad press but thought a good proportion of the owners were a bit emotional,” he said. “But it’s all true!”

In late August, Mr Passas, like the other 15 apartment and business owners in his block, received letters outlining compensation offers from Sydney Metro.

Not only were the offers at least $100,000 below what Mr Passas believes is fair market value, the agency informed him that he had 21 days to accept after which they are “deemed to be withdrawn”.

“We’re people who want to abide by the law, but the negativity and the pushing causes stress,” he said. “It’s just not fair.”

The practice has prompted Sydney lawyer David Newhouse to ask transport minister Andrew Constance for an “urgent review” of the agency’s “unfair tactics”.

Mr Newhouse, whose firm Newhouse and Arnold Solicitors represents more than a dozen owners dealing with Sydney Metro, told Mr Constance on October 21 the practice is “placing unnecessary pressure on clients when trying to resolve these claims”.

He told Fairfax Media: “I have never seen such tactics used by a NSW Government agency in my 20 years of law practice in compulsory acquisition.”

The revelation comes shortly after Premier Mike Baird announced an overhaul of the compulsory acquisition system in response to increasing concerns about fairness.
Mr Constance has yet to respond to the letter and declined to comment.

Sydney Metro program director Rodd Staples said the 21-day expiry period “represents an offer that’s made at the end of a process of engagement with the property owner and their representatives” that typically takes several months.

“It’s designed to make sure that we do move through the acquisition and negotiation process in a timely fashion and to get feedback from the owner about whether they want to consider an alternative offer,” he said.

Mr Staples said where extensions are requested “typically we have extended the time where it’s reasonable. We have no intention of trying to pressure owners in this process”.

But Mr Newhouse noted that the Land Acquisition (Just Terms Compensation) Act says owners are entitled to fair market value.

“Threatening owners that if they do not accept the government’s offer it will be withdrawn is not in the spirit of the Act,” he said.

Opposition transport spokeswoman Jodi McKay said the practice was “completely unscrupulous and demonstrates agencies are setting their own rules around compulsory acquisition”.

“It comes back to the culture of the organisation, which is established from the very top,” she said.

“If the transport minister thinks this is the appropriate way to behave, then he is not fit for his job.”

Sean Nicholls is the State Political Editor of The Sydney Morning Herald.

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THE TURNBULL GOVERNMENT RELEASES ITS VALUE CAPTURE DISCUSSION PAPER

 

 

THE TURNBULL GOVERNMENT RELEASES ITS VALUE CAPTURE DISCUSSION PAPER

(It has been pointed out with Value Capture the artist should have depicted high-rise!!)

FROM CAAN …

WHAT we are experiencing in this Nation and especially in NSW is a transfer … a pipeline of our Public Assets to private interests with some $130 Billion worth of public assets sold off in NSW alone!

CAAN has touched on this topic from time to time, and we offer some “food for thought” … it comes back to the “Culture which is established at the very Top” ..

Value Capture is about billing the people who get the benefit of the Infrastructure Project contrary to those in its path with Compulsory Acquisition, and being shortchanged on the market value of their properties.

WILL the “I am not a Totalitarian Government” tax those that get the benefits to give it to the people who lose their homes or businesses?

A prime example of this is WestCONnex during the construction phase of 2 – 5 years the victims have lost $Millions!

Sydney Metro accused of ‘unfair pressure tactics’ in acquiring homes

Property owners undergoing compulsory acquisition told compensation offers expire in 21 days

https://www.smh.com.au/national/nsw/compulsory-acquisition-sydney-metro-accused-of-unfair-pressure-tactics-20161028-gscowk.html

VALUE CAPTURE … it’s pernicious … it’s saying to everyone in the community “I have got this idea and I am going to make you pay for my idea”!

THE GREENS NOT KEEN ON PRIVATE HIGH SPEED RAIL PLAN WITH VALUE CAPTURE AND FOREIGN INVESTMENT

https://www.railexpress.com.au/greens-not-keen-on-private-high-speed-plan/

THIS IS WHY!

“The Greens have concerns about information absent from today’s announced CLARA proposal, apparently due to commercial in confidence considerations.

“Being asked to ‘just trust us’ is not good enough for a project of this scale.”

THE TURNBULL GOVERNMENT RELEASES ITS VALUE CAPTURE DISCUSSION PAPER

Australian Government releases Value Capture Discussion Paper
November 20, 2016

USING ‘value capture’ to help deliver more infrastructure is the subject of a discussion paper released last week by Urban Infrastructure Minister Paul Fletcher and Assistant Minister for Cities and Digital Transformation Angus Taylor.

The discussion paper examines the potential to more widely use value capture funding to supplement the billions of dollars each year already spent by all three levels of Australian governments on infrastructure.

It sets out a range of options for the Australian Government to action to stimulate the use of value capture in the development and delivery of infrastructure and describes various potential value capture approaches—including tools already in use by state and local governments.

(The NSW Government is investigating the use of value capture to help deliver the proposed Parramatta light rail project / Transport for NSW.)

Mr Fletcher said the Australian Government was seeking public and industry input on the value capture concept.

“Many states and territories already use value capture funding models to support major upgrades,” Mr Fletcher said.

“Similarly, developer charges are commonly used by local government authorities to help deliver utilities for new housing developments.

“If we are to make better use of value capture, governments must first understand why beneficiaries might be willing to pay for projects; identifying who these beneficiaries are and when they might materially gain from projects funded through this method.”

Mr Taylor said there was a need to find new funding models within the constrained fiscal environment.

“Government is getting smarter about linking transport investment with long term planning for affordable homes, closer to where people work and closer to services like schools and hospitals,” Mr Taylor said.

“Through City Deals, we are looking at changing the way we fund infrastructure.

“Encouraging public private partnerships to pay for road and rail corridors where land values will increase, can be a wise way to invest taxpayers’ money.”

Submissions on the discussion paper will be open until 3 February 2017. More information is available from the Department of Infrastructure and Regional Development website at

http://investment.infrastructure.gov.au/about/funding_and_finance/value_capture.aspx

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VALUE CAPTURE …

VALUE CAPTURE ….

https://en.wikipedia.org/wiki/Value_capture

 

Municipalities have used numerous means to capture unearned land values increased by the addition of public infrastructure. This image shows how building height and density (and therefore value) has increased near rail transit stations.

Value capture is a type of public financing that recovers some or all of the value that public infrastructure generates for private landowners

Description

Public investments, such as building transportation or sewer facilities, can increase adjacent land values, generating an unearned profit for private landowners. The unearned value (increases in land value which otherwise profit private landowners cost-free) may be “captured” directly by converting them into public revenue (see georgism). Thus, value capture internalizes the positive externalities of public investments, allowing public agencies to tax the direct beneficiaries of their investments.

Urban planners and finance officials are often interested in value capture mechanisms, for at least two reasons: 1) because they offer a targeted method to finance infrastructure benefiting specific land, and 2) because some such investments can generate private investment in the area, which will more widely benefit the city (e.g., by providing employment opportunities, shopping and other amenities, and a more robust and diverse tax base.) It can be politically useful to capture for the city treasury a share of the positive externalities of city-financed investment. This can help address public concern about the fact or perception of unfair windfalls when specific owners’ land values increase after urban infrastructure investment is paid from general city revenues.

Although it is not always talked about as such, the most common value capture mechanism is the general real property tax, with no special features other than regular assessment of market value; this is because the common real estate tax includes the less known land value tax. The value of any given land is determined by its proximity to various amenities (both public and private). Thus, for example, when a new subway station or highway interchange is installed, land near the new facility becomes more valuable. Investment in capital improvements to land can synergistically generate capital investment in other nearby locations, which further increases land value. Thus, even if the rate of taxation does not change, the tax revenue generated from properties which benefit goes up by way of higher land values and increased development. The effectiveness of value capture depends, of course, on a smoothly functioning ad valorem property or land value tax system, with regularly updated assessments.

Examples

Value capture strategies can be applied to developers or landowners, and they can be applied before or after a public improvement is built.[1] In the case of new public transit facilities, the property value premium nearby can be as high as 167%.[2]Types of value capture include the following:[3]

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