Homeowners Happier than Renters | Real Estate Ownership
From the Feb 2007 edition of API Australia Magazine. Australian homeowners are more satisfied with life than renters, research suggests.
Higher incomes did show a trend towards levels of wellbeing but renters earning $91,000 to $120,000 reported marginally higher well being that outright real estate home owners earning $15,000 to $30,000.
“It’s apparent that there are consistent differences between these three groups of people (real estate renters, mortgages, and outright homeowners) at each level of household income, and that the people who are renting real estate have the lowest wellbeing,” a report on the research concluded.
“The fact that this is so consistent across the demographic groups seems to suggest that it’s something intrinsic to the type of person who rents real estate that is causing this difference.
“One possibility is that people who are renting are more transitory. This may be because they have a job that causes them to relocate frequently, thereby making impractical for them to invest in their place of residence.”
Real estate renters also more likely to be single; people living with a partner reported higher levels of well being.
Tax | You can only have one ‘main residence’ at a time for tax purposes, professional services firm BDO Kendalls reminds real estate property investors in Australia.
Kendalls partner Eddie Chung said while profits from the sale of a ‘main residence’ are generally exempt from capital gains tax in Australia, this may not be the case if the real estate home owner had owned more than one residence at a time or has vacated the residence at any point before its sale.
“The ‘temporary absence rule’ mean that as long as you don’t own another main residence elsewhere in Australia and you temporarily leave your home, for example, on an extended sabbatical overseas, you may continue to treat your real estate property as your main residence, even though you may not actually be living in it,” Chung says.
“If you rent your home out during your absence, you can continue to treat the property as your main residence for up to six years.”
Chung said the key was to have lived in the property before first vacating it, otherwise the temporary absence rules wouldn’t apply. It wasn’t possible to own more than one main residence at any given time, even if you did live at both places, he said.
“You cannot argue that you and your spouse own a different main residence each, unless you’re genuinely separated. The sale of one of those residences will normally be subject to capital gains real estate tax.”
The only exemption was a six-month grace period between the purchase of a new home and the sale of your old main residence.
The Australian Unity Wellbeing Index found that people who were paying off a mortgage or owned their home outright consistently reported higher levels of well being than real estate renters. The results were consistent across different age groups and income levels. The Wellbeing Index results from a survey of 2000 people who answer questions about their satisfaction with different aspects of their lives.
Higher incomes did show a trend towards levels of wellbeing but renters earning $91,000 to $120,000 reported marginally higher well being that outright real estate home owners earning $15,000 to $30,000.
“It’s apparent that there are consistent differences between these three groups of people (real estate renters, mortgages, and outright homeowners) at each level of household income, and that the people who are renting real estate have the lowest wellbeing,” a report on the research concluded.
“The fact that this is so consistent across the demographic groups seems to suggest that it’s something intrinsic to the type of person who rents real estate that is causing this difference.
“One possibility is that people who are renting are more transitory. This may be because they have a job that causes them to relocate frequently, thereby making impractical for them to invest in their place of residence.”
Real estate renters also more likely to be single; people living with a partner reported higher levels of well being.
Treat ‘Main Residnece’ carefully
Tax | You can only have one ‘main residence’ at a time for tax purposes, professional services firm BDO Kendalls reminds real estate property investors in Australia.
Kendalls partner Eddie Chung said while profits from the sale of a ‘main residence’ are generally exempt from capital gains tax in Australia, this may not be the case if the real estate home owner had owned more than one residence at a time or has vacated the residence at any point before its sale.
“The ‘temporary absence rule’ mean that as long as you don’t own another main residence elsewhere in Australia and you temporarily leave your home, for example, on an extended sabbatical overseas, you may continue to treat your real estate property as your main residence, even though you may not actually be living in it,” Chung says.
“If you rent your home out during your absence, you can continue to treat the property as your main residence for up to six years.”
Chung said the key was to have lived in the property before first vacating it, otherwise the temporary absence rules wouldn’t apply. It wasn’t possible to own more than one main residence at any given time, even if you did live at both places, he said.
“You cannot argue that you and your spouse own a different main residence each, unless you’re genuinely separated. The sale of one of those residences will normally be subject to capital gains real estate tax.”
The only exemption was a six-month grace period between the purchase of a new home and the sale of your old main residence.
Labels: Homeowners, Main Residence, Property Investments, Real Estate Ownership, Renters, Tax Incentives
posted by hattrick @ 10:08 AM
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