It’s sad but true, we’re back with yet ANOTHER tax grab (It feels like just yesterday that we were waving goodbye to Queensland’s diabolical land tax…) and this time…

We’re talking about a tax that’s set to take 62.5% of your earnings!!! 🤯🏃

Folks, we’re covering everything you need to know about Windfall Gains Tax – what it is, where it came from (according to Ben 😉) and how much you can be expecting to pay. 

(Oh, did we mention you only have 30 DAYS to pay?!)  

Yep. Welcome back to our first Q&A session for 2023 where we’re tackling this shocking tax grab, along with a line-up of fantastic questions like… 

👉 Should I renovate and rent now or rent then renovate later?!

👉 Why buy Established over new housing?! (How much do you really benefit?)

👉 And if diversification is the key to growth, should one expand their investments beyond property?!  

 Another jam-packed episode that sees Ben more fired up than ever (and not just because he gets called Benjy 😉). Tune in now!  

 

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Questions We Answer

Question from Kristy on Rent and Renovate – Now or Later?  

Hello to The Property Couch and all listeners. 

My question relates to an investment property I have in Geelong. It’s a 1980’s property in original condition on a very large block and it’s planned to be a long term hold. 

I’m trying to examine two strategies. The first being just simply rent out and renovate it when it’s time to sell maybe in 20 years versus renovate now and rent it out.Where would we be in 20 years?  

With the first strategy, the property would be very rundown by then. With the second strategy the property would likely need another renovation. Of course, I’m trying to be smart with the numbers to see where we might end up. Which strategy would produce more capital growth? Any thoughts or suggestions with how I might evaluate this? Many thanks and can’t wait to hear back from you. 

 

Question from Wayne on New Housing vs Established 

G’day boys. 

Wayne here from Brisbane. I wanna ask a question here. I’m a little worried that the quality of the information or my voice might be tainted let me start off we go the pies. 

So I’ve been listening to your podcast for quite some time now. I’ve circled to most of the episodes. One of the questions I have is around the established properties versus obviously the house and land packages and so on. 

I get that there’s a whole issue with the supply and demand in newer states and all that sort of stuff. I guess where the confusion for me comes is generally the properties will experience growth because the phases and stages of new developments obviously the land gets more expensive I don’t think it ever gets cheaper so that would kind of dictate that you’re actually going to get some capital growth even in the early stages and if you buy it for long term, 20 or 30 years then obviously at some point these newer states are going to become the established estates as they open up more land etc. 

So obviously the savings that happen in terms of stamp duty being paid on new purchases if you’re only paying it on the land is significant savings there. The non-cash deductions on new properties obviously there’s significant rebates and sort of stuff there from a tax perspective. 

So just wondering why it’s kind of not the accepted way to go?  

I’m not disputing what you guys teach, obviously, you’ve been doing this a couple lot longer than I have but I just I just wonder if you can explain am I missing something? Or you know my reading it right and and just you know it’s one of the options that are available to us so anyway thanks for the info.

 

Question from Ned on Windfall Gains Tax 

G’day Bryce, G’day Ben.

Firstly, thanks so much for all the work you do with the property couch podcast as well as your book. I’ve really really enjoyed my time reading and listening so thanks for all the hard work that you do. It’s really valuable for all your community, no doubt.

My name is Ned, I’m 22 and I’m from Adelaide and I have a question about windfall gains tax particularly how that looks in Victorian Market. I think it could be of interest of payable who either hold currently assets in the rural sector or those looking to potentially invest in that market too so if you could explain what it is exactly, first of all and how it looks going in to the next few years.

I think a lot of people would be interested so thanks guys.I will be looking forward for your response.

 

Question from Cam on Property & Shares – Diversification 

Hi Bryce and Ben.

My name is Cam. Now I have a question for you. If diversification is really the key your growth then the key to your assets, then would you recommend considering other asset clauses such as shares or ETFs?

The reason being is obviously we all love diversification and we do not want to throw our eggs in to one basket. Obviously the great thing about property is that there is a lot of leverage that you can place in to one asset. You could control half a million dollar property in less than 20% even in some cases 5% down.

But if diversification is the key and you have the sizeable amount that you wanted to truly be diversified, with franking credits and dividends being paid, is shares and ETFs something that all people should consider? Or are shares and ETFs something that people should  consider in combination of couple of investment properties?

 

Free Stuff Mentioned… 

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• Episodes referenced:  Episode 418 | The Hidden Forces Driving Property Values 

 

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Here’s some of the gold we cover… 

• 0:00 – Welcome back & send us your Qs!  
• 4:32 – Free Resources: Make Your WealthSPEED Go Faster, Free Suburb Report & Moorr!  
• 12:29 – Mindset Minute: If you feel you’re in control, you’re more likely to… 
• 16:31 – Q1) Renovate now or later?  
• 17:30 – What Kristy should be considering…  
• 19:13 – Ben & Bryce’s rule of thumb for renovations! 
• 21:25 – Our thought process behind this question (+ potential benefits)   
• 25:54 – Q2) Buying New Housing vs Established 
• 28:20 – Why land-to-asset ratio matters! 
• 31:19 – It boils down to THIS thinking… 
• 34:10 – Folks, it’s about that 1 or 2%!  
• 38:00 – Spruikers will show you this 🤨 (& where risk lives)  
• 41:20 – Q3) Windfall Gains Tax  
• 42:13 – Everything you need to know about Windfall Gains Tax (An extra 62.5% tax?!?!?)  
• 45:15 – …And here’s when the thresholds kick in! (It’s not great folks)  
• 46:50 – Let’s dive into an example… 
• 48:25 – Who ultimately pays?  
• 50:55 – This has been our message since Day 1!  
• 53:08 – The hidden impacts of this tax + how to circumnavigate it  
• 55:14 – Q4) Property & Shares – Diversification 
• 56:56 – The best investors say this…  
• 59:31 – Weighing up the benefits vs costs with diversification  
• 1:02:20 – Folks, we will NEVER say this…(& the checklist we do recommend!)  
• 1:03:26 – How to diversify your portfolio beyond property!  

And… 

• 1:07:50 – Change your life. Organise your tabs by groups AND colour?! 
• 1:09:34 – Disappointing news from APRA…. 

 

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