Legislation

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As coincidence would have it I recently had a conversation with Dr Hazel Easthope, Senior Research Fellow, City Futures Research Centre UNSW following the news last month of yet another delay being announced in the now long over due review of NSW Strata Title legislation.
It has been confirmed that the Strata law reforms in NSW are to be delayed (again) with changes now not due to come into force until July next year. That’s another 18 months, which for such an important area of reform appears almost to be neglected.
The plans have been delayed several times since being announced in 2011. The reforms to the state’s 50-year-old strata laws are now urgent, but this message appears not to being heard by the State Government. In part a series of ministerial changes have hampered the process, but concerns among apartment dwellers are on the rise, and their concerns are justified.
The research being undertaken by Dr Easthope is looking at the experience of people living in strata titled property. Her work will look at details of people and seek to learn about their experiences of living in an apartment, and what they like and dislike about strata tile living. How strata title impacts the feeling of ‘home’ and how the quality of building management impacts residents. It’s notable that the quality of building management is now a key issue for many apartment buyers and investors.
The aim being to better understand the needs of different people living together in strata schemes and what can be done to make them more attractive places for everyone. The survey is due to be completed by 30thJune 2015 and I look forward to seeing the results.
The survey can be accessed at <a href="https://www.be.unsw.edu.au/research-centres-and-clusters/city-futures/about-us" target="_blank">City Futures</a>, and along with Dr Easthope I will keep readers up to date on the survey and related topics.
 Also in a national survey on strata-titled property conducted by Queensland’s Griffith University, the author, Professor Christopher Guilding has named building defects as the main challenge for apartment owners, which was also identified as the biggest issue for strata lawyers, and in the top five by resident building managers.
As a result the SMH recently reported that Professor Guilding is calling for a federal government inquiry about the issue, which must also put even more pressure on the NSW review process.
Professor Guilding will be releasing the results of the Inquiry Into Key Challenges In Australian Strata Title in September at the launch of the biennial national conference Strata and Community Title in Australia for the 21st Century.
The work by Professor Guilding and Dr Easthope appears very opportune and may well be central to helping to maintain the quality of life for the many apartment owners and future buyers across Australia and I am sure there will be a lot of valuable information and insights to share.
Peter Chittenden is managing director for residential of Colliers International. He can be contacted <a href="https://www.projectagenda.com.au/" target="_blank">here</a>.
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pchittenden-eLqUUC8TWW

Yet more strata legislation delays: Peter Chittenden

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The Turnbull Government has released its draft legislation to help home buyers get into their first homes.
Legislation to establish the First Home Super Saver Scheme (FHSSS) allows first-home buyers to save for a deposit inside their superannuation account, attracting the tax incentives and earnings benefits of superannuation, and "turbo-charging" their ability to save.
Savers will be able to contribute $30,000 (up to $15,000 a year within existing caps), and be able to withdraw the contributions along with deemed earnings in order to help fund a deposit on their first home. Pre-tax contributions are taxed at 15 per cent; withdrawals will be taxed at marginal tax rates less a 30 per cent offset.
The measures are to commence on 1 July 2018, but voluntary FHSSS contributions can be made from 1 July 2017 and will be eligible for withdrawal (provided all criteria are met) from 1 July 2018.
Housing affordability is a major issue affecting many Australians and there is no silver bullet, Treasurer Scott Morrison has said.
The Government has released a consultation draft of legislation to implement the FHSSS and has encouraged interested stakeholders to make a submission on the draft legislation. 
The exposure drafts and details of the consultation process are available on the <a href="https://www.treasury.gov.au/" target="_blank">Treasury website</a>.
1) How would my savings be released?
The consultation draft provides that you would receive the funds after applying to the ATO and declaring your eligibility. The ATO will arrange for money to be released from your super and will pay it to you within a reasonable processing time. You would then have a set period to buy a home (see below). This would ensure that you can have access to the funds on the day of exchange, allowing you to use the savings directly for the deposit.
2) Who would be eligible to use the FHSSS?
The consultation draft provides that you may apply to have your savings released if you are 18 years or older, you have not used the FHSSS before, and you have never owned real property in Australia. This means that if you have owned an investment property, commercial property or vacant land you would not be eligible to use the FHSSS. The FHSSS is intended to help people who are not already in the property market. You may be able to leverage your existing property to help you buy a home.
3) What if my partner has owned a home?
If you would be eligible to use the FHSSS, you would not be disqualified just because a person you are buying your home with is not a first home buyer.
4) What kind of home could I buy?
The consultation draft provides that you would have to purchase residential premises. This could include vacant land (if the land was to be built on), but would not include any premises that is not capable of being occupied as a residence, and would not include houseboats or motor homes.
5) How long would I have to buy a home?
The consultation draft provides that you would have 12 months after releasing the savings to sign a contract to purchase a qualifying home. You would be able to ask the ATO for a 12-month extension.
 6) Would I have to live in the home?
Yes. The consultation draft provides that you must occupy the premises as soon as practicable, and for at least six months of the first 12 months after it is practicable to do so. So, for example, if you bought a house-and-land package using the FHSSS, you would have to occupy the house for at least six months in the first 12 months after the house is built. This would ensure the FHSSS is used to help purchase the saver’s home, not (say) an investment property.
7) How would the release amount be calculated?
The consultation draft provides that you would be able to withdraw up to your ‘maximum release amount’, which is equal to the sum of your eligible contributions and associated deemed earnings. If you made concessional contributions (e.g. through salary sacrifice), you would be able to withdraw 85 per cent of those contributions (reflecting the 15 per cent tax). You would be able to withdraw 100 per cent of any non-concessional contributions. Deemed earnings calculated using the Shortfall Interest Charge (currently 4.78 per cent) would be based on when eligible contributions are made up until the date release amount is determined.
Contributions made during 2017-18 would be taken to be made on 1 July 2017. Contributions in later years would be taken to be made at the start of the month they are made. To calculate earnings and count contributions towards the annual and total contribution limits of the scheme, earlier contributions would count before later ones. However, within the same year any non-concessional contributions would be counted before any concessional contributions (e.g. salary sacrifice). This would maximise the size of your deposit in most circumstances. You would be free to withdraw a smaller amount if you wished.
8) What if the deemed earnings exceed actual earnings?
Historically, super fund earnings have generally exceeded the Shortfall Interest Charge. Therefore, this policy would generally be expected to increase the funds remaining in super for individuals using the scheme. A saver would never be able to withdraw more money than is in the saver’s account(s).
9) How much tax would be withheld on withdrawal?
The ATO would withhold an amount before releasing the savings to you, to ensure that you won’t have to pay the tax in your next income tax return. The amount withheld would reflect the ATO’s best estimate of your tax payable. If the ATO could not make an estimate, it would withhold 17 per cent of the withdrawal amount.
10) What would happen if you do not buy a home in the period?
 The consultation draft provides that you must either recontribute the release amount into superannuation, or pay a tax equal to 20 per cent of the amount released from superannuation. This tax would remove the benefit of the tax concession you received by using the FHSSS, ensuring the tax concession is targeted at first-home buyers.
11) Would accessing the FHSSS affect social security payments?
No. The consultation draft excludes the release amount from means tests, to prevent double-counting of income that was included in means tests when it was first earned. The consultation draft legislation is intended to implement the FHSSS as described above. It is not yet law. The Government intends to introduce legislation into Parliament to make it law after considering the results of this consultation process.  
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j.ballantyne1990-6AQqhLzZaK

The 11 rules that FHBs need to know to benefit from the First Home Super Saver Scheme  

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Queeensland's Retail Shop Leases Amendment Act has been proclaimed, with a commencement fixed for 25 November 2016.
The amendments, which passed the Parliament in May 2015, followed a consultative review of the <a href="https://www.legislation.qld.gov.au/LEGISLTN/ACTS/2016/16AC021.pdf" target="_blank">Retail Shop Leases Act</a> throughout 2011-2013.
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jonathanchancellor-7SQnKwU6yx

Property 101: Queensland retail shop leases act amendments

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The Property Stock and Business Agents Amendment (Property Reports and Exemption) Regulation 2016 (NSW) will commence operation on 15 August 2016.
The regulation introduces a new clause, 46A, to the Property Stock and Business Agents Regulation 2014. This clause exempts real estate agents from regulation under the Property Stock and Business Agents Act 2002 (the Act) when undertaking commercial property agency work on behalf a large commercial property owner or of a related entity.
The definitions of the key terms in this clause are outlined below:
Related entity
A corporate real estate agent which is either owned or controlled by the property owner, forms part of the same corporate holding group as the property owner or, less likely, controls the property owner, is a related entity to which the new exemption applies.
Large commercial property owner
A large commercial property owner is an entity that owns a property that has an aggregate market value of $40 million or more, or an aggregate floor area of more than 20,000 square metres.
Commercial property agency work
Commercial property agency work encompasses selling, purchasing, exchanging, leasing, managing or otherwise dealing with property that is not residential property or rural land.
Reducing regulation or removing protections?
Real estate agents are currently subject to regulation when undertaking property work on behalf of commercial property owners. For example, they must be licensed, have professional indemnity insurance to cover for certain civil liabilities that arises from their conduct as an agent, undertake regular professional development, and operate their trust accounts in accordance with the requirements of the Act.
However, this new regulation exempts real estate agents from operation of the Act when acting for a related entity or for large commercial property owners. 
This change has been the subject of discussion over several years. Some believe it to be unnecessary for real estate agents engaging in commercial property agency work to be regulated when working for related entities or for clients who might be regarded as having sufficient commercial expertise and influence not to need the protections afforded by the Act.
Contrary arguments point to the fact that it is not just the agent’s principal with whom the agent deals.  Buyers and lessees ranging from large corporates to sole traders have significant interaction with commercial real estate agents and frequently entrust not insignificant sums to them by way of deposits or rent.  The removal of the protective operation of the Act in this sector of the real estate economy may not best serve the interests of the community in the long run.
Conclusion
The new regulation will only completely deregulate those commercial real estate agents who only undertake work for related entities or large commercial property owners.  The remainder of commercial agents’ activities will continue to be regulated.  It may be that these changes will affect only a small part of the commercial agency market.
For further information from Mills Oakley, <a href="https://www.millsoakley.com.au/" target="_blank">click here</a>.
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Property 101: Property Stock and Business Agents Amendment 

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The New South Wales government is imposing an anti-urban legislative and development agenda on Sydney. This agenda conceptualises Sydney as centre – a privileged social, cultural and geographic core – and elsewhere.
Policies like building the multi-billion-dollar WestConnex roads system, increasing penalties and restrictions for cyclists, privatising public housing in inner-city suburbs and selling public assets have direct impacts on the existence of “the urban” in Sydney.
This agenda limits the capacity of Sydneysiders to engage with their city in diverse, improvised or alternative ways. This is despite government claims that it addresses imbalances and inequities between the centre and the rest of the city in terms of spatial advantage, job opportunities, public spending and services.
The suburbanisation of the city
One of sociologist Henri Lefebvre’s enduring contributions to urban theory and practice is the notion of the “right to the city<a href="https://au.wiley.com/WileyCDA/WileyTitle/productCd-0631191887">”</a>. Lefebvre was not merely advocating access to space in the city or its resources, but the right to be urban.
By urban, Lefebvre meant the phenomenon that emerges from the complexity, collaboration and improvisation that are possible in cities. The urban is not the product of a privileged core. Rather, it is a decentralised network of diverse communities, practices and places that give rise to cities’ convivial and inclusive potential.
While the government’s lockout laws have attracted national and international attention for their deleterious effect on urban areas, they are merely the most visible of a raft of anti-urban policies. The privatisation of public housing in Millers Point and urban renewal plans for Waterloo, which include demolishing public housing and relocating 4000 tenants, are detrimental to the social and cultural mix of the urban.
Globally, the pattern is a familiar one. Redeveloped or new housing and commerce are targeted at more affluent investors and consumers. Areas that were urban in their social and cultural mix become increasingly homogeneous.
Some commentators refer to these outcomes as gentrification. However, inner-city areas have already undergone varying degrees of gentrification. Usually this is triggered by first-wave gentrifiers, such as artists, who value urban attributes.
One pleasure of the urban is spontaneous encounters and experiences with difference. The sociologist Zygmunt Bauman has called this “mixophilia”.
Historically, the suburbs have offered a refuge for the “mixophobic”. In these places, monoculturalism is a retreat from difference. The current urban development and transformation, at the behest of state government bodies such as Urban Growth, is the suburbanisation of urban areas.
Regulating flows in the city
City governance, design and planning are largely concerned with regulating the movement of people, goods, ideas and capital. Globally, this increasingly involves the facilitation of flows that support neoliberal state and corporate agendas, and the blocking of flows that do not.
One stated rationale for WestConnex, a project involving an unprecedented transfer of public funds (A$18 billion and rising) to the private sector, is increased flows to and from the city centre.
In response to the project’s critics, the Baird government has relied on crude rhetoric which insists it is tackling the geographic and social division between an inner city populated by “cultural elites” and “chattering classes” and an under-served wider populace.
Postcode should not determine access to resources in the city. Yet Westconnex is the product of an anti-urban imagination that re-iterates the single central core, rather than multiple localised urban centres. Government support for the Commonwealth Bank’s move to the newly privatised Australian Technology Park in Redfern, instead of to Parramatta as previously planned, reinforces that view.
Combined with restrictive and punitive measures that deter cycling and proposed steep rises in public transport fares, WestConnex limits Sydneysiders’ choices for mobility around the city. It consolidates the car as a dominant mode of transportation.
Unlike public transport and cycling, the car seals us off from encounters with others. It is the least urban form of transport.
The Baird government’s policy agenda for Sydney denies the right to the city, both as the right to be urban and the right to a city that is urban. It confirms Lefebvre’s position that those who manage cities devise and implement regulatory frameworks and infrastructure that are frequently – and paradoxically – detrimental to the emergence of the urban.
 
Kirsten Seale is adjunct fellow, Institute for Culture and Society, Western Sydney University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/kirsten-seale-234742" target="_blank">here</a>.
<h4><a href="https://theconversation.cmail20.com/t/r-l-edhiduk-qitldhiii-c/" target="_blank"> </a></h4>
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jchancellor-FAypfDUnLy

Suburbanising the centre: the Baird government’s anti-urban agenda for Sydney

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By 2019, all Australian companies reporting under the International Financial Reporting Standards (IFRS) will be required to comply with new global rules on leasing following the release in January of a guide Lease Accounting Standard by the International Accounting Standards Board (IASB).
The Australian Accounting Standards Board (AASB) announced on March 1 it was adopting the new standard.
The new legislation will change the way leases are reported on company balance sheets and will be implemented in 2019. But listed companies will be required to start comparative reporting in 2017 which means decisions need to be taken about future assets and leases
A new paper by property services firm JLL says the impact would is potentially huge for Corporate Australia real estate occupiers. Leases will become a key feature on company balance sheets, effectively inflating assets and liabilities.
It is advising Australian corporates to start analysing the day one impact of their leased property portfolio on their financial statements.
“The new standard will meet the need for greater transparency of companies’ lease assets and liabilities, which are currently off balance sheet. However, it will be a significant administrative burden for companies to adhere to it. In particular retailers, leisure operators, banks and other companies that rely heavily on real estate leasing, will have dramatically increased financial reporting obligations,” says Sylvia Koh, head of Corporate Consulting, Asia Pacific at JLL.
Key considerations for businesses include:
* Review current real estate portfolios and lease arrangements
* Re-assess the merits of owning assets outright versus lease arrangements
* Re-evaluate lease tenure and structuring of lease (for example short-term versus long-term, rent review type and end of lease mechanisms)
“Given there will no longer be an off-balance sheet advantage of leasing, the question many companies will need to consider is – own or lease?” said Tony Wyllie, JLL’s Australian head of Corporate Solutions Integrated Portfolio Services.
“Items requiring inclusion on company balance sheets from 2019 onwards include rent payments and fixed rental uplifts.
“For companies that draw heavily on lease arrangements, we are encouraging them to start preparing now for the changes, because as early as 2017 they must start preparing comparative financial statements under the new standards to meet with annual reporting requirements.
“If the goal of companies is to minimize the impact of leases on balance sheets, then they will need to carefully assess the options of owning, future lease structures and the key commercial aspects of leases such as – lease terms, rent terms and options,” said Wyllie.
Added Koh, “Going forward we’re likely to see changes in terms of how real estate deals are structured; more companies will explore flexible options such as serviced offices and co-working spaces; and there may be increased interest in considering owning versus leasing real estate.”
She said while the changes would be gradual, companies need to act swiftly. 
“If you currently don’t have your lease data in a structured fashion that is of auditable quality, it will be important to get the right advice and resources to put it in order as the immediate first step towards complying with the new standard.”
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