THE new tax system has created a number of distortions in property investment which makes it difficult to predict the ramifications of the changes.
According to a report from Ashe Morgan Winthrop, based on the Property Investors Winter Survey, the availability of first homebuyer benefits, reduced stamp duty in some States as well as GST levied on some property sales skews the information.
After more than a month with the changes implemented, nearly half of all respondents were still uncertain which sector would benefit most from the changes.
Among those participants who were able to have developed a clear view, the greatest percentage believed the residential market would derive the greatest benefit.
About 50 per cent of property professionals expect a fall in activity over the next six months.
“This view has been supported by the dramatic fall in building commencements following the GST inspired construction rush to complete prior to the end of the financial year,” the report said.
WA investors were the most positive about the tax changes on their industry.
About 33 per cent of participants expected rising levels of activity in the property market in the next six months because of the new tax system.
New South Wales and Victoria were the most pessimistic with only 11 per cent expecting market activity to increase.
