Only in Byron Bay, Lo Doc Loans and Tax, Buyers Market

By: U.d. Pemberton

Only in Byron Bay
I loved this story of a property in the Byron Hinterland being sold in the $mil and a half region. It seems the potential new owners discussed the purchase with their psychic Geomancer - this is like a Feng Shui expert. They were told that the vendors were not yet ready to leave this property and that they should wait for a more auspicious time. When told this news, the vendors did what any sensible Byron property owner would do - called in their personal shaman for a full psychic cleanse and sage smudging. Negotiations are now proceeding smoothly.
Lo Doc Loans and Tax
For some time now the ATO have been rattling their swords over Lo doc loans. It seems - Shock! Horror! - some people have been exaggerating their declared income when going for a loan while minimizing it when filing with the tax Department. It is understandable, I suppose, that the ATO would wish to tax the Great Australian Tax Payer at the higher figure if given the chance and this, apparently, is what they intend to do.
A recent story from Crikey.com states the commissioner of the ATO Michael D'Ascenzo is saying he knows that people are fibbing on their Lo Doc Loan declarations and declares that if any are caught during an audit then the higher figure will be what is the taxable amount. Of course brokers have been made out to be the baddies in this situation as well but the real story here is this is just another indication of the coming tightening of monetary policy. If Paul Keating was still around he would say this is the 'credit squeeze we have to have!'
Put out the "Fire Sales"
In a similar vein, our local member Don Page is behind a move to stop Mortgagee-in-Possession auctions going on as "Fire Sales". The banks and agents are only interested in getting back the mortgage debt when someone defaults on their loan with no interest in helping the vendor retain as much equity as possible. If the new law is accepted it means that if a house is sold under value, the Mortgagee can be held accountable for the balance and all effort must be made to properly promote and list the property (not just ring up a mate and do a deal!)

Buyer's Market
Domain.com pointed out that last weekend there were twice as many properties going to auction in Sydney than normal - about 1300 - nearly double the previous average of 590. However clearance rates have sunk to 63%, which is the lowest since August 2005. That is a statistic verifying my intuition that we have quickly turned from what was expected to be a boomer season for agents into a bit of a bear market. The future - no one will predict but I feel the sentiment is equal between those saying we will have a soft 6 - 12 months to the doom and gloomers saying we are in for an extended rough patch.

Resources:
www.byronpropertysearch.com.au
www.realestate.com.au

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