Borrowers have been warned their mortgages could soon come with higher interest rates... Calls for vacant property owners to face higher tax bills...
Borrowers to face higher interest rates regardless of RBA moves
While speculation mounts the Reserve Bank of Australia (RBA) will announce a further cut to the official cash rate in coming months, borrowers have been warned their mortgages could soon come with higher interest rates.
At this week’s board meeting the RBA left the cash rate on hold at 1.75%, but many commentators believe the central bank may reduce the rate again in August following the release of updated inflation figures.
“If the June quarter inflation data, which is out a week before the RBA’s August board meeting, provides another weak reading, the chances of a rate cut in August are high,” CoreLogic research head Tim Lawless said following the RBA’s decision this week.
The last cut to the cash rate came in May and while many lenders passed some, if not all of that reduction on to borrowers, John Kolenda, head of mortgage broking network 1300HomeLoan, said consumers shouldn’t expect similar relief in the future.
“The banks have been waiting until the election is out of the way before making any moves independently of the RBA,” Kolenda said.
“They want to lift rates in response to rising funding costs and the additional costs they face for the extra compliance and regulatory increase on reserves they will have to have in place by the end of June,” he said.
“While the RBA has room to cut its cash rate further due to the two speed economy and subdued consumer confidence, any future reduction is likely to be negated.”
Calls for vacant property owners to face higher tax bills
One of New South Wales’ major real estate industry groups has called for an overhaul of land tax in the state, including hitting some investors with a higher tax bill.
As a part of a submission calling for an “urgent review” of land tax in the state, the Real Estate of New South Wales believes owners of vacant property should fax higher land tax payments.
“REINSW also suggests that people who purchase property for land banking purposes, whereby a premises is left vacant intentionally, should pay additional land tax as a penalty for not providing the property for the benefit of the community,” REINSW president John Cunningham said.
The REINSW isn’t the only one to propose such an idea, Bloomberg this week reported that Gregor Robertson, mayor of the Canadian city of Vancouver, is also considering a similar idea.
"We’re looking at new regulation and a carrot-and-stick approach to making sure that houses aren’t empty in Vancouver," Robertson said.
"If you’re not using your property -- either living in it or renting it out -- then you have to pay more tax. Because effectively it’s a business holding, and should be taxed accordingly,” he said.
(Your Investment Property)
While speculation mounts the Reserve Bank of Australia (RBA) will announce a further cut to the official cash rate in coming months, borrowers have been warned their mortgages could soon come with higher interest rates.
At this week’s board meeting the RBA left the cash rate on hold at 1.75%, but many commentators believe the central bank may reduce the rate again in August following the release of updated inflation figures.
“If the June quarter inflation data, which is out a week before the RBA’s August board meeting, provides another weak reading, the chances of a rate cut in August are high,” CoreLogic research head Tim Lawless said following the RBA’s decision this week.
The last cut to the cash rate came in May and while many lenders passed some, if not all of that reduction on to borrowers, John Kolenda, head of mortgage broking network 1300HomeLoan, said consumers shouldn’t expect similar relief in the future.
“The banks have been waiting until the election is out of the way before making any moves independently of the RBA,” Kolenda said.
“They want to lift rates in response to rising funding costs and the additional costs they face for the extra compliance and regulatory increase on reserves they will have to have in place by the end of June,” he said.
“While the RBA has room to cut its cash rate further due to the two speed economy and subdued consumer confidence, any future reduction is likely to be negated.”
Calls for vacant property owners to face higher tax bills
One of New South Wales’ major real estate industry groups has called for an overhaul of land tax in the state, including hitting some investors with a higher tax bill.
As a part of a submission calling for an “urgent review” of land tax in the state, the Real Estate of New South Wales believes owners of vacant property should fax higher land tax payments.
“REINSW also suggests that people who purchase property for land banking purposes, whereby a premises is left vacant intentionally, should pay additional land tax as a penalty for not providing the property for the benefit of the community,” REINSW president John Cunningham said.
The REINSW isn’t the only one to propose such an idea, Bloomberg this week reported that Gregor Robertson, mayor of the Canadian city of Vancouver, is also considering a similar idea.
"We’re looking at new regulation and a carrot-and-stick approach to making sure that houses aren’t empty in Vancouver," Robertson said.
"If you’re not using your property -- either living in it or renting it out -- then you have to pay more tax. Because effectively it’s a business holding, and should be taxed accordingly,” he said.
(Your Investment Property)
