WATCH: How to Sell Your Property Without Losing Sleep (or Profit) | Not Another Property Podcast Ep. 5

[00:00:11,040 → 00:00:11,280] All right.

[00:00:11,280 → 00:00:11,960] Welcome back everybody.

[00:00:11,960 → 00:00:12,800] In this episode we’re talking all things selling property without losing sleep with me.

[00:00:17,160 → 00:00:18,720] I’ve got my property power team.

[00:00:18,720 → 00:00:22,020] Before we get into any content, though, I want to remind you that this podcast is only general in nature.

[00:00:24,120 → 00:00:29,100] It does not constitute any financial, legal or tax advice or otherwise.

[00:00:29,300 → 00:00:33,320] It is strongly recommended that you seek personalized and professional advice before you go acting on anything that is specific to your situation.

[00:00:37,920 → 00:00:42,440] I’m joined by Michael O’Malley, mortgage manager from Rate Sydney CBD.

[00:00:42,780 → 00:00:46,640] Andrew Chan, strategic financial planner from Phoenix Private Wealth Management.

[00:00:46,880 → 00:00:50,040] George Koletti, principal accountant from Access Professionals

[00:00:50,300 → 00:00:55,940] Daniella Muzitano, executive and founder of Titlespace Conveyancing and myself

[00:00:55,940 → 00:00:59,540] Gianni Musumeci, investment property advisor from Leverage Property Advisors.

[00:00:59,820 → 00:01:02,820] I want to kick off with you. Sorry, George.

[00:01:03,000 → 00:01:08,780] The biggest item when it comes to selling, especially investment property, is capital gains tax considerations.

[00:01:08,840 → 00:01:13,440] How can people avoid or at least reduce legally, capital gains tax?

[00:01:14,520 → 00:01:16,400] I think we sort of covered this in another episode.

[00:01:16,400 → 00:01:19,400] The most important thing is keeping your records.

[00:01:19,500 → 00:01:23,060] Having the, accurate figures of what it actually cost you to buy

[00:01:23,340 → 00:01:27,960] and all transaction costs in relation to that, even interest costs

[00:01:27,960 → 00:01:30,200] and holding costs, if there was a period of time

[00:01:30,200 → 00:01:33,960] where it wasn’t being used, can add to the cost base.

[00:01:33,960 → 00:01:37,680] So you’ve got to be very mindful that, circumstances change.

[00:01:37,680 → 00:01:39,960] Was it periods of time? It was a principal residence.

[00:01:39,960 → 00:01:41,940] Was it a pricipal residence to start with?

[00:01:41,940 → 00:01:43,700] At what point in time you selling it?

[00:01:43,700 → 00:01:52,760] Is the next one that you’re buying, sorry that you’re living in, or had purchased going to be a less of a capital gain if we use principal residence exemption.

[00:01:53,040 → 00:01:55,140] There so many different circumstances.

[00:01:55,140 → 00:01:59,460] But the key is to, to ensure that you’ve actually got really great record keeping.

[00:01:59,940 → 00:02:00,380] Yeah. Okay.

[00:02:00,380 → 00:02:04,220] So that’s important, especially when it comes to reporting and, and

[00:02:04,220 → 00:02:04,920] and whatnot.

[00:02:04,920 → 00:02:08,580] Because that will calculate your capital gains tax essentially.

[00:02:08,580 → 00:02:11,740] And there’s a few different circumstances involved there as well.

[00:02:11,740 → 00:02:18,400] But it may be coming back to a financial planning perspective. If I’m considering selling down the track, how can I prepare for something

[00:02:18,400 → 00:02:19,160] like that? Andrew.

[00:02:19,160 → 00:02:22,680] Yeah, like, oh, you know, working with George it, it’s important.

[00:02:22,940 → 00:02:26,560] Part of the record keeping is, well, if you for example,

[00:02:27,340 → 00:02:28,920] we were talking about tax concessions.

[00:02:28,920 → 00:02:31,740] So the assumption is that they, they have some.

[00:02:31,740 → 00:02:39,920] So they they’re living in the property at the time and they move out.

[00:02:39,920 → 00:02:42,920] And so you had the CGT exemption on principal as a residence.

[00:02:42,920 → 00:02:43,280] Right.

[00:02:43,280 → 00:02:47,100] And you can also move back in and you can also refresh that.

[00:02:47,100 → 00:02:47,400] Right.

[00:02:47,400 → 00:02:51,920] So but the minute you let it tick over that six years,

[00:02:52,440 → 00:02:56,220] then it be at that point what you should do is get a valuation.

[00:02:56,940 → 00:03:00,380] Because you can prove at that point in time that that’s the valuation in time.

[00:03:00,480 → 00:03:05,040] If you don’t, then you expose yourself to living to the tax office

[00:03:05,400 → 00:03:06,980] to come up with a valuation.

[00:03:06,980 → 00:03:10,920] And that valuation might be estimated prior to that date,

[00:03:10,920 → 00:03:15,200] but that prior date might be 30%, more

[00:03:15,200 → 00:03:19,160] or less of a cost basis, which increases your tax, your capital gains.

[00:03:19,440 → 00:03:22,520] And so just be wise in those situations.

[00:03:23,420 → 00:03:25,840] And and tying back to in,

[00:03:25,840 → 00:03:28,940] in relation to record keeping is if you,

[00:03:29,340 → 00:03:34,220] if you do want to keep your property, then at some point

[00:03:34,220 → 00:03:37,740] we might find that we might never sell that property in our lifetime.

[00:03:37,800 → 00:03:41,100] So then then even though you keep those records,

[00:03:41,100 → 00:03:45,000] just make sure you, you those records might become obsolete.

[00:03:45,000 → 00:03:45,840] But don’t assume that.

[00:03:45,840 → 00:03:49,500] So just keep them all the way to the point of your estate.

[00:03:49,640 → 00:03:50,840] Because if it passes to that,

[00:03:50,840 → 00:03:53,840] to that point in the state, then it can be dealt with then.

[00:03:54,080 → 00:03:58,980] But but in a nutshell, it’s all about if it was an investment property,

[00:03:59,240 → 00:04:03,140] then it’s just simply, as George says, anything that, you know,

[00:04:03,140 → 00:04:07,340] any capital costs that you attribute to nothing, that’s deductible.

[00:04:07,620 → 00:04:11,240] You know, people sometimes confuse the two and they want to check everything in,

[00:04:11,420 → 00:04:13,080] make sure you didn’t have you.

[00:04:13,080 → 00:04:17,380] You can make sure that any improvements, renovations or those sorts of things,

[00:04:17,380 → 00:04:18,660] you know, they’re great.

[00:04:18,660 → 00:04:21,660] But yeah, you’re also stripping out your depreciation as well.

[00:04:21,800 → 00:04:22,000] Yeah.

[00:04:22,000 → 00:04:25,560] I think moving back to goals based advice, like once the property

[00:04:25,560 → 00:04:29,180] has achieved that goal, whether it be a capital value more than likely

[00:04:29,180 → 00:04:33,140] is going to be a capital value because you’re selling it you are then

[00:04:33,140 → 00:04:36,720] considering timing your exit as well and the costs associated with that.

[00:04:37,160 → 00:04:37,460] Yeah.

[00:04:37,460 → 00:04:41,460] So there’s this costs in terms of agents fees.

[00:04:41,460 → 00:04:43,380] So you know often

[00:04:44,480 → 00:04:45,800] in financial planning we use

[00:04:45,800 → 00:04:48,800] property to accelerate wealth creation and accumulation.

[00:04:49,740 → 00:04:51,080] Because it just makes sense. It’s just easy.

[00:04:51,080 → 00:04:52,560] You don’t have to think about too much.

[00:04:52,560 → 00:04:55,620] And you’re diversifying between asset classes

[00:04:55,880 → 00:04:57,020] once you’ve purchased your property.

[00:04:57,020 → 00:05:00,720] But the reality is is that after they’ve they’re done what they need to to do,

[00:05:01,080 → 00:05:04,280] the properties tend to be older and, bit more worn.

[00:05:04,460 → 00:05:07,500] And so there’s a bit more work that needs to go in to maintain that.

[00:05:07,500 → 00:05:10,100] And when you move to a different stage in your life where you’re

[00:05:10,100 → 00:05:12,600] now drawing down income, you don’t have sufficient

[00:05:12,600 → 00:05:15,180] properties in your portfolio to use you just rental income.

[00:05:15,180 → 00:05:16,100] You can just sit on it.

[00:05:16,100 → 00:05:17,400] You might find as you’re older,

[00:05:17,400 → 00:05:19,200] you don’t want to deal with the complexities of that.

[00:05:19,200 → 00:05:21,120] So you start to sell down property.

[00:05:21,120 → 00:05:24,560] And so you know what you’re saying to George is to say what helps

[00:05:24,560 → 00:05:28,100] you sell down property is wait till you’re not working anymore.

[00:05:28,280 → 00:05:30,500] You know, it sounds really simple, but, like,

[00:05:30,500 → 00:05:33,500] if you’re you’re earning 200 grand of 300 grand a year,

[00:05:33,640 → 00:05:38,220] and then and then you’re paying tax at, you know, 46.5 cents in the dollar.

[00:05:38,240 → 00:05:41,600] It’s very different when you just pay that back and then you can start again.

[00:05:41,600 → 00:05:45,860] You can so and so now in terms of when we’re strategizing on when to do

[00:05:45,860 → 00:05:48,860] these sorts of sales and divesting, it can make sense.

[00:05:48,940 → 00:05:52,800] And we had a conversation earlier about whether we buy joint

[00:05:52,800 → 00:05:54,080] tenants or tenants in common.

[00:05:54,080 → 00:05:57,960] Then you can sometimes get around, if one partner retires earlier,

[00:05:57,980 → 00:06:00,140] that they can sell their their portion to someone else.

[00:06:00,140 → 00:06:04,380] If there’s someone else who’s taking over the property that is within their circle.

[00:06:04,380 → 00:06:04,640] Right.

[00:06:04,640 → 00:06:10,260] And so, in on in that basis, you know, when you’re selling property,

[00:06:10,260 → 00:06:14,120] there’s, there’s not only the tax element, but there’s also what you’re going to do

[00:06:14,120 → 00:06:14,840] with the money.

[00:06:14,840 → 00:06:18,060] You might there’s another example when you’re selling property

[00:06:18,240 → 00:06:22,520] that for financial planning, probably not appropriate but I’ll raise it is

[00:06:23,060 → 00:06:27,140] now people don’t underst don’t unaware of is that you can make downsides

[00:06:27,140 → 00:06:31,280] of contributions to your super fun you know so you know you’re over 50

[00:06:31,600 → 00:06:34,380] and you’re fully retired or, you know, when he retired that

[00:06:34,380 → 00:06:37,380] you’re over 50 and you’ve lived in a home for more than ten years.

[00:06:37,700 → 00:06:39,920] And it’s your principal place of residence.

[00:06:39,920 → 00:06:43,040] You can put $300,000 into your super fund.

[00:06:43,040 → 00:06:46,920] So example of, the family home is, is,

[00:06:48,100 → 00:06:48,560] there

[00:06:48,560 → 00:06:52,080] is own joint tenant, so you can have the husband

[00:06:52,160 → 00:06:55,520] and the wife So, you know, often when we buy property,

[00:06:56,040 → 00:06:59,820] I say think about not only you pay off the asset,

[00:06:59,960 → 00:07:02,940] but you also think about how much you need to live in retirement.

[00:07:02,940 → 00:07:06,840] So sometimes we we we the properties

[00:07:06,840 → 00:07:10,800] in Australia are so expensive, it just takes up so much resources.

[00:07:11,100 → 00:07:15,800] And then in the end you were often very asset rich and cash poor.

[00:07:15,800 → 00:07:20,220] So it’s to say, okay, this is a vehicle which we can drive our wealth,

[00:07:20,220 → 00:07:25,460] then we can have a larger asset value to drive that wealth through gearing.

[00:07:25,640 → 00:07:30,080] And then when it’s time, then we downsize to a smaller property,

[00:07:30,240 → 00:07:33,620] get the finance, or if we want to do, if you have no dependents,

[00:07:33,620 → 00:07:35,540] you can have finance if you have dependents.

[00:07:35,540 → 00:07:39,380] Well, you know, we, I do have clients that that they named

[00:07:39,560 → 00:07:42,620] their fund the ski fund, you know, spend the kids inheritance fund.

[00:07:42,860 → 00:07:45,020] But but but really, you know, you know, what?

[00:07:45,020 → 00:07:49,020] We what we have is a situation where you can unlock that equity

[00:07:49,280 → 00:07:49,860] and then

[00:07:49,860 → 00:07:53,900] and then then spread all your assets again, we can and support

[00:07:53,900 → 00:07:55,160] and also live in a home and,

[00:07:55,160 → 00:07:58,380] and put money to more efficient tax structures like superannuation

[00:07:58,580 → 00:07:59,700] to fund that retirement.

[00:07:59,700 → 00:08:02,480] And so it really gives them options.

[00:08:02,480 → 00:08:07,280] Tax is that is a secondary consideration is what I’m saying.

[00:08:07,500 → 00:08:10,520] And the fact that the asset and what it would do and it’s a quality

[00:08:10,520 → 00:08:13,320] asset the whole period of time, that’s where the focus should be.

[00:08:13,320 → 00:08:14,880] I’m finding that a lot of particularly people

[00:08:14,880 → 00:08:17,420] that get to retirement and they spend a lot of time,

[00:08:17,420 → 00:08:19,280] like I said, property is a very expensive house.

[00:08:19,280 → 00:08:20,480] They get to retirement.

[00:08:20,480 → 00:08:23,300] They’ve worked hard to pay off the debt by retirement,

[00:08:23,300 → 00:08:26,300] and then all of a sudden then they consider their retirement.

[00:08:26,360 → 00:08:29,360] So I’ve got no superannuation because I’ve put it all into my home

[00:08:29,420 → 00:08:32,880] and they have to either downsize or do a reverse mortgage.

[00:08:33,680 → 00:08:37,780] So yeah, it can be a very difficult, thing to consider as well.

[00:08:38,000 → 00:08:41,020] Your finances and with when it comes to that,

[00:08:41,020 → 00:08:44,960] I wanted to step back a little bit and talk about it from a lending perspective.

[00:08:44,960 → 00:08:47,120] Now, a lot of people might not think about this is they just thought,

[00:08:47,120 → 00:08:50,640] think, oh, yeah, I’ll pay off the debt when I, when, when I saw my home.

[00:08:50,640 → 00:08:53,520] But how do you consider lending when you’re selling

[00:08:53,520 → 00:08:56,460] and what are the implications of selling still under debt.

[00:08:56,460 → 00:08:56,820] Yeah.

[00:08:56,820 → 00:09:06,400] Look, selling a property with a mortgage is a very normal situation. That’s not uncommon at all. But the one inescapable law is that when you sell, the bank gets paid first.

[00:09:06,840 → 00:09:10,280] So if you sell and there’s excess funds, you get to keep that button,

[00:09:10,660 → 00:09:11,640] you know, property.

[00:09:11,640 → 00:09:14,480] We live in an environment where we are a bit accustomed to property

[00:09:14,480 → 00:09:17,280] constantly on an upward track, but the gray hairs around the table

[00:09:17,280 → 00:09:20,280] can remember a time when that wasn’t necessarily true.

[00:09:20,300 → 00:09:22,740] And, and property values can fall.

[00:09:22,740 → 00:09:27,000] And if you in that situation, if you, if you’re selling in a falling market

[00:09:27,000 → 00:09:30,660] or if your your sales price is low, you can end up with negative equity.

[00:09:30,740 → 00:09:33,780] And the problem with that is that you’ve got to make up

[00:09:33,780 → 00:09:37,320] that shortfall between the the net sales proceeds and the lending.

[00:09:37,320 → 00:09:40,080] So you’ll end up having to pay that back to the bank.

[00:09:40,080 → 00:09:43,080] The other consideration is from a borrowing perspective,

[00:09:43,260 → 00:09:44,580] it doesn’t really make sense.

[00:09:44,580 → 00:09:48,180] You know, we’re in an environment where we’ve seen recently, thankfully

[00:09:48,480 → 00:09:51,000] mortgage interest rates coming down.

[00:09:51,000 → 00:09:54,320] And so fixing your loan at the moment in a falling interest rate environment

[00:09:54,320 → 00:09:55,820] doesn’t really make sense.

[00:09:55,820 → 00:09:58,400] But there are plenty of legacy fixed loans out there.

[00:09:58,400 → 00:10:02,420] And if you break a fixed loan, they can be quite substantial fixed rate break costs

[00:10:02,820 → 00:10:04,580] and you want to take those

[00:10:04,580 → 00:10:06,560] into consideration before you pull the trigger and make that decision to.

[00:10:06,560 → 00:10:09,400] Sell at a higher level. What I like, typically it’s you.

[00:10:09,400 → 00:10:10,920] You’re gonna have to pay the remainder of the interest

[00:10:10,920 → 00:10:12,440] plus a fee or something like that.

[00:10:12,440 → 00:10:15,540] It’s it’s a bit of a complex calculation and you can never really guess what

[00:10:15,540 → 00:10:16,520] the numbers going to be.

[00:10:16,520 → 00:10:18,800] You go to the lender and they’ll tell you what it is.

[00:10:18,800 → 00:10:21,000] But I mean, it relates to the funding cost.

[00:10:21,000 → 00:10:26,060] Banks have funded your mortgage at a certain cost at a certain point in time.

[00:10:26,460 → 00:10:31,460] And if the if the penalized by that, then the break cost can be pretty substantial.

[00:10:31,620 → 00:10:32,700] Yeah. Fairly significant.

[00:10:32,700 → 00:10:33,240] I think it’s.

[00:10:33,240 → 00:10:37,520] Important to note from, from a market’s persoective to the age of the person

[00:10:37,520 → 00:10:38,760] is really, really important

[00:10:38,760 → 00:10:42,800] because I’m not I’m not a I’m saying from our perspective,

[00:10:43,940 → 00:10:45,480] when you get to a certain age,

[00:10:45,480 → 00:10:47,280] you need to be actually talking to your broker

[00:10:47,280 → 00:10:49,160] probably first before you get hitting the trigger,

[00:10:49,160 → 00:10:52,560] because your next borrowing might not be approved,

[00:10:52,560 → 00:10:56,600] because you’re at an age where the banks and funders are saying, hang on a second,

[00:10:56,600 → 00:10:59,100] what’s your exit strategy to actually have that?

[00:10:59,100 → 00:11:00,920] Mike you may want to talk about that that’s that.

[00:11:00,920 → 00:11:04,800] Oh yeah, I’m in for for virtually every every lender that I deal with.

[00:11:04,800 → 00:11:06,620] If the applicant is over 50 years old,

[00:11:06,620 → 00:11:09,680] we need to provide a written exit strategy that looks in detail.

[00:11:09,780 → 00:11:11,280] Yeah. At what they go to do.

[00:11:11,280 → 00:11:13,860] And it’ll consider things like what’s your asset profile,

[00:11:13,860 → 00:11:15,260] what are your savings like?

[00:11:15,260 → 00:11:17,940] Do you have other property that you can sell those sorts of things.

[00:11:17,940 → 00:11:21,080] And we need to really sort of drill into and rationalize

[00:11:21,080 → 00:11:23,880] what what the exit strategy looks like. And it has to make sense.

[00:11:23,880 → 00:11:26,400] You know, I’ve had to write a couple. Yeah. Yeah. That’s right.

[00:11:26,400 → 00:11:27,000] So the only.

[00:11:27,000 → 00:11:30,360] On the book because funnily enough, banks want their money back.

[00:11:30,860 → 00:11:31,280] Yeah.

[00:11:32,520 → 00:11:33,440] Strangely enough.

[00:11:33,440 → 00:11:35,540] Yeah.

[00:11:35,540 → 00:11:38,480] People might not think of this, but what are some of the legal considerations

[00:11:38,480 → 00:11:41,480] that people need to understand when it comes to selling their property?

[00:11:42,720 → 00:11:45,320] If they haven’t spoken to the accountant first

[00:11:45,320 → 00:11:49,800] it’s capital gains tax because that is calculated

[00:11:49,800 → 00:11:53,460] from the date that the contract is signed not the date that it settles.

[00:11:53,720 → 00:11:58,520] So you might have signed a contract in March with the settlement

[00:11:59,000 → 00:12:03,280] in July, whatever a long settlement capital gains is from the date of sale.

[00:12:03,280 → 00:12:03,540] Yeah.

[00:12:03,540 → 00:12:07,940] So that is something especially at this time of the year, we see a lot of clients.

[00:12:07,940 → 00:12:12,540] I prepare the contract by not signing it until 1st of July.

[00:12:12,540 → 00:12:17,480] So we’re sitting there hanging in there waiting for that 1st of July to kick in.

[00:12:17,480 → 00:12:20,700] But that means they’ve they’ve got the advice beforehand

[00:12:20,700 → 00:12:23,840] and we don’t really need to, to, to provide it ourselves.

[00:12:23,840 → 00:12:24,080] Yeah.

[00:12:24,080 → 00:12:28,040] That’s why when a client tells me, I’m selling my investment property

[00:12:28,040 → 00:12:32,120] and it’s around, you know, April, May, I’m like, okay,

[00:12:33,380 → 00:12:35,120] are you aware of these?

[00:12:35,120 → 00:12:38,300] Do you know when we keep it within this financial year?

[00:12:38,320 → 00:12:42,780] Are we, you know, holding onto, you know, 1st of July onwards.

[00:12:43,020 → 00:12:46,700] So and Daniella’s job is harder from that perspective to more recently

[00:12:46,700 → 00:12:47,840] because now you need

[00:12:47,840 → 00:12:51,600] clearance from the ATO in order for her not to withhold the portion

[00:12:51,600 → 00:12:52,380] for capital gains.

[00:12:52,380 → 00:12:54,320] And from 1st July. Exactly.

[00:12:54,320 → 00:12:57,320] So it used to be up to $750k.

[00:12:57,380 → 00:13:01,800] Now every single vendor needs to apply for the clearance certificate

[00:13:01,800 → 00:13:04,640] to prove that they are Australians and not foreigners. Yeah.

[00:13:04,640 → 00:13:06,720] And then that way they have money left over

[00:13:06,720 → 00:13:09,200] so that the government can get their, cut as well. There you go.

[00:13:09,200 → 00:13:12,240] Yeah, I see a lot of people, especially this time of year.

[00:13:12,620 → 00:13:15,960] At the moment, we’re in June and a lot of sales agents will be,

[00:13:16,200 → 00:13:18,140] yes, the property is on the market.

[00:13:18,140 → 00:13:20,400] However, we’re not signing the contract until one July.

[00:13:20,400 → 00:13:24,380] I find that case is a lot, and that’s to Andrew and George’s point,

[00:13:24,380 → 00:13:27,920] where you’re looking to time your exit depending on your level of income

[00:13:27,920 → 00:13:28,820] in this financial year.

[00:13:28,820 → 00:13:31,080] So often you’ll have a chat with your financial planner

[00:13:31,080 → 00:13:32,280] and your accountant to say,

[00:13:32,280 → 00:13:34,700] how am I finances looking around about April or May?

[00:13:34,700 → 00:13:38,460] And they’ll say, okay, what do I need to do to pay this tax this financial year

[00:13:38,640 → 00:13:42,260] and say, yes, you can sell the property, but don’t do it until 1st July.

[00:13:42,260 → 00:13:44,960] So I’m finding a lot on that in the market.

[00:13:44,960 → 00:13:48,620] Point of clarity on that two is that it’s actually not the date of settlement.

[00:13:48,960 → 00:13:50,580] It’s the date of your contract. Yeah.

[00:13:50,580 → 00:13:51,020] So it’s

[00:13:51,020 → 00:13:54,480] when you’ve entered into the contract, which is when your CGT events happen.

[00:13:54,480 → 00:13:57,600] So people think, oh, you know, I actually did it.

[00:13:57,600 → 00:14:00,320] You know, I’m settling in, you know, after July.

[00:14:00,320 → 00:14:01,200] Yeah.

[00:14:01,200 → 00:14:03,500] But you actually sign the contract on the 30th of June.

[00:14:03,500 → 00:14:05,880] It’s the difference between contract date and contract

[00:14:05,880 → 00:14:07,380] settlement and settlement or contract.

[00:14:07,380 → 00:14:08,480] And so yeah, yeah.

[00:14:08,480 → 00:14:09,000] Yeah.

[00:14:09,000 → 00:14:11,820] There’s also, changes in superannuation.

[00:14:11,820 → 00:14:15,240] Is that the law recently changed the way it allows

[00:14:15,240 → 00:14:18,420] people to not made a work test to put money into superannuation.

[00:14:18,420 → 00:14:23,220] So you no longer in your 60s, mid 60s is now up to 74.

[00:14:23,220 → 00:14:26,960] So, you know, you might be in a situation where you have large capital gains,

[00:14:26,960 → 00:14:29,000] you’re starting to realize and you put that away.

[00:14:29,000 → 00:14:30,860] But you can also make concessional contributions.

[00:14:30,860 → 00:14:33,840] You don’t have to be a business owner to be able to that.

[00:14:33,840 → 00:14:35,820] Every every individual can do that now.

[00:14:35,820 → 00:14:40,080] So there there are ways, if you’re not working to still mitigate

[00:14:40,080 → 00:14:42,140] some of that tax. I think that direction that to us.

[00:14:44,040 → 00:14:47,040] But what I want oh what

[00:14:47,300 → 00:14:52,200] we’re talking about reasons to sell and bad leavers and and legal reasons.

[00:14:52,200 → 00:14:54,800] But I’ll probably highlight a different perspective

[00:14:54,800 → 00:14:58,640] when selling property is that sometimes in all the best planning you can,

[00:14:58,940 → 00:15:02,800] you can sell because we’ve worked out why, you know, it’s a great area.

[00:15:02,820 → 00:15:06,740] The the suburb, it’s exploded, we bought in Brisbane because we knew

[00:15:06,740 → 00:15:10,040] the Olympics was coming and and look here, just flock there.

[00:15:10,040 → 00:15:12,960] And now we’re going to sell for at the right time.

[00:15:12,960 → 00:15:16,920] But there are situations where they’re the bad leave quote situations.

[00:15:16,920 → 00:15:21,200] And, and some of the experiences that I’ve had is, you know,

[00:15:21,320 → 00:15:24,540] first home buyers or inexperienced buyers bought

[00:15:25,200 → 00:15:29,000] and then they’re bought unknowingly in a catchment and catchment.

[00:15:29,000 → 00:15:33,840] Could be, then the Housing Commission.

[00:15:34,060 → 00:15:37,940] And if you haven’t done your research or it hasn’t been done for you, you can

[00:15:38,180 → 00:15:41,660] you can fall afoul because that the neighbors might not be,

[00:15:41,960 → 00:15:44,040] the quiet neighbors that you’re hoping for.

[00:15:44,040 → 00:15:46,600] And that can affect the sale price. Right.

[00:15:46,600 → 00:15:49,020] Or you can, you can you can you can buy

[00:15:49,020 → 00:15:52,340] in, say, heritage or conservation area

[00:15:52,340 → 00:15:56,300] and that can really impact the sale value as that happens.

[00:15:56,340 → 00:15:59,820] And so, you know, the good leave aside is, you know, if you’re

[00:16:00,060 → 00:16:03,060] if you’re on open council and you know where the, where the,

[00:16:03,080 → 00:16:04,700] where the planning provisions are going to change.

[00:16:04,700 → 00:16:06,140] And if you knew where to buy, then that

[00:16:06,140 → 00:16:07,680] that would be a totally different situation.

[00:16:07,680 → 00:16:09,660] But like, you know,

[00:16:09,660 → 00:16:13,400] the appreciation of those considerations need to be considered.

[00:16:13,400 → 00:16:17,180] And so what when we went for from a financial planning perspective,

[00:16:17,180 → 00:16:20,880] is that we buy property and it’s bought at a point in time,

[00:16:21,180 → 00:16:24,440] but there can be circumstances that unforeseen with all the checks

[00:16:24,440 → 00:16:28,580] and balances that that might require you to reconsider whether you’re

[00:16:28,580 → 00:16:32,120] going to sign up for the next stage in that, in that assets.

[00:16:32,220 → 00:16:35,300] And a good example of that is when you’re stuck with a special levy.

[00:16:35,480 → 00:16:38,760] So we often have these huge apartment blocks or these shared

[00:16:39,080 → 00:16:42,060] amenities, services, gyms, pools, lifts.

[00:16:42,060 → 00:16:46,140] And when those lease come time to change over,

[00:16:46,440 → 00:16:50,120] you’re looking at hundreds of thousands of of special levies.

[00:16:50,120 → 00:16:52,440] And depending on how how many people in your life

[00:16:52,440 → 00:16:55,260] it might be, it’s not an insignificant sum.

[00:16:55,260 → 00:16:57,260] You need a good conveyancer to check the sinking fund.

[00:16:57,260 → 00:16:59,200] That’s right. Oh, that’s right.

[00:16:59,200 → 00:17:01,440] That is that actually happened to one of our clients? Yeah.

[00:17:01,440 → 00:17:03,300] They actually came to us and said, you know,

[00:17:03,300 → 00:17:05,600] can you have a look at this property? Because I’m thinking about buying it.

[00:17:05,600 → 00:17:09,420] And we had a look and the, the actual, the balance in the strata

[00:17:09,420 → 00:17:12,920] reports said that it was -$1 million in a sinking.

[00:17:12,920 → 00:17:16,060] I always say so it’s not the report.

[00:17:16,060 → 00:17:19,060] Often it’s more important than the contract.

[00:17:19,580 → 00:17:20,280] Okay. Yeah.

[00:17:20,280 → 00:17:20,800] Yeah, yeah.

[00:17:20,800 → 00:17:23,800] Because there’s certain milestone events, especially in an apartment where, yes,

[00:17:23,800 → 00:17:27,720] you change lifts or change the plumbing, or you need to paint the outside

[00:17:27,720 → 00:17:29,660] of the building, or especially in New South Wales.

[00:17:29,660 → 00:17:30,500] What’s happening now is,

[00:17:30,500 → 00:17:34,260] the state government is telling everybody they need to review and potentially

[00:17:34,260 → 00:17:38,800] change the cladding on the outside from the petrochemical to something else.

[00:17:38,800 → 00:17:42,020] So, yeah, there’s the strata report is super important.

[00:17:42,020 → 00:17:45,300] And that could also be a factor in selling as well.

[00:17:45,560 → 00:17:48,620] Like whether or not you sell your property for that price.

[00:17:49,060 → 00:17:51,960] And I think this there was come to a period where,

[00:17:51,960 → 00:17:54,980] especially during Covid when people were buying under ultra

[00:17:54,980 → 00:17:57,980] low interest rates like never seen before, interest rates below 2%.

[00:17:58,220 → 00:17:59,220] And then a couple of years later,

[00:17:59,220 → 00:18:01,340] we had a bit of a sharp increase in interest rates.

[00:18:01,340 → 00:18:03,720] People were finding themselves in dire straits

[00:18:03,720 → 00:18:07,040] with all like, oh, I bought the property based on that period in time,

[00:18:07,040 → 00:18:10,140] but now I can no longer afford and now forced to sell a result.

[00:18:10,380 → 00:18:11,900] And this goes back to the financial planner.

[00:18:11,900 → 00:18:13,940] Like you need to buy with the end in mind.

[00:18:13,940 → 00:18:16,260] Not at this time, because I tell people that

[00:18:16,260 → 00:18:18,720] in a booming period you can sell anything

[00:18:18,720 → 00:18:22,520] like people will buy anything through scarcity or hype or FOMO.

[00:18:22,840 → 00:18:26,840] But then when it comes time to sell, like you actually need to market your product

[00:18:26,840 → 00:18:28,280] and you might not get the price that you want.

[00:18:28,280 → 00:18:31,280] So that’s something that you really need to consider.

[00:18:31,400 → 00:18:32,720] But look, thank you everybody for your time.

[00:18:32,720 → 00:18:35,120] And that was, really a lot to unpack there

[00:18:35,120 → 00:18:36,920] and a lot of considerations around selling.

[00:18:36,920 → 00:18:39,780] So I really appreciate that. Thanks for joining us. Thank you.

[00:18:39,780 → 00:18:40,000] Gianni