Declutter Christmas

November 30, 2020

Seven steps to decluttering your home before Christmas

Peter Walsh – Author
First published November 23, 2020 by Realestate.com

For many Australians 2020 has been a year to forget. As we get ready to embrace (a hopefully much better) 2021, now is the perfect time to clear the slate by decluttering and organising the home. 

Getting organised has a huge number of benefits. Not only does it make life a little easier, but studies show that looking at an organised, clean space brings a sense of calm and clarity.

And with the weather warming up ahead of Christmas, it’s the perfect time to open up the home and clear out unwanted items that have been building up.

Seven steps to decluttering

Step into 2021 with a fresh outlook. Here are seven steps to help make that happen.

1. Start small

Start by picking just one area of the home to concentrate on. Think about which areas are going to be used most often in the next few weeks. It might be the living room or the kitchen – but it also might be an outdoor area used for entertaining and relaxing with family and guests over the festive period.

2. Stay focused on one project at a time

Too many times, a good decluttering and organising job goes off the rails because people get started on too many projects all at the same time. To avoid this, limit the scope of the organising job. For instance, if the space being cleaned up is the kitchen, focus on one particular aspect of the space. What parts of the kitchen are most likely to be used during the holidays? It could be the serving platters, baking supplies, tableware or even cleaning out the pantry.

3. If it’s not used then discard

After choosing an area to focus on, gather every single item that belongs in that category and spread them out. Pick out anything that is ready to be thrown away such as damaged, soiled or broken items as well as anything that is no longer in style or is not loved anymore. Put those items in a box for the local op shop or gift or dispose of them in some other manner.

4. Store loved and used items

Locate items that are well-loved and used regularly. Be disciplined here and make sure these items are actually well loved and handy today. This limited group of treasures are the ones that will be stored within easy reach.

5. Set limits for things used infrequently

The last category is sometimes the hardest to deal with. It includes items that are perfectly fine but are not used regularly or particularly loved. Be a bit ruthless and decide exactly how much storage space is available for this entire category. If there is room for it then keep it – but there’s nothing wrong with leaving some extra room for future growth.

6. Clear, dust and clean before reloading spaces

Give the area a deep clean before putting anything back. Dirt, dust and even mould can collect in almost all storage areas. Take care of this now while the space is empty. Then start loading things back putting items used most regularly at the front so they can be accessed easily.

7. Dance your happy dance

Marvel at how beautifully organised the area is. Take pictures. Be proud. And then move on to the next project.

Focused and systematic gets the job done

If you limit decluttering to just one category within one space, the job is much more ‘doable’. Finish one job completely and then start on the next. Repeat this process to have Christmas decluttering done in plenty of time for the festivities.

Property Valuations in SMSF

November 27, 2020

New ATO guidance on real property valuations in SMSFs

The ATO has recently released new guidance regarding valuation of real property inside self-managed super funds (SMSFs).

Generally, all assets held within an SMSF must be reported at market value to be compliant with Regulation 8.02B of the Superannuation Industry (Supervision) Regulations 1994 (SISR).

In the past, unless the fund was paying a pension or held in-house assets, trustees could provide a valuation for fund assets every three years. This is no longer adequate, and assets must be reported at market value every year with evidence to support the valuation.

This evidence should also support the market value for the property as at 30 June of the year of audit or as close to this date as possible.

The ATO has stated that no single piece of evidence will be sufficient for this purpose, unless the property has been recently sold, but would require evidence from multiple sources in agreement. Examples of potential sources given by the ATO include:

  • independent appraisals from a real estate agent (kerbside)
  • contract of sale if the purchase is recent and no events have occurred to the property that could materially impact its value since the purchase
  • recent comparable sales results
  • rates notice (if consistent with other evidence on valuation)
  • net income yield of commercial properties (not sufficient evidence on their own and only appropriate where tenants are unrelated).

Future Assist Accountants (FAA) will follow the above guidelines regarding property valuations inside SMSFs going forward and may seek your assistance or assistance of third-party property agents/valuers on your behalf.

What happens if we don’t follow this guidance?

The ATO indicates that it is the responsibility of the trustee(s) of the fund to provide objective and supportable evidence, in accordance with these guidelines, to the auditor of their SMSF to satisfy the requirements of Regulation 8.02B. The auditor’s role is then to form an opinion on whether the provided evidence is sufficient and appropriate. If the auditor cannot form an opinion or finds the evidence otherwise lacking, this will prevent the audit of your SMSF from being finalised with further information being requested.

Regulation 8.02B and evidence required to support real property valuations | Australian Taxation Office (ato.gov.au)

NSW Ends Stamp Duty

November 25, 2020

NSW Takes The Lead By Ending Stamp Duty

Finbar O’Mallon – Reporter
First published at November 17, 2020 by Financial Review

NSW will lead the way on tax reform with its plan to make the transition from stamp duty on property purchases to a land tax, as part of a suite of measures designed to stimulate the economy as it recovers from the coronavirus recession.

Businesses and economists have praised Tuesday’s 2020-21 state budget, which is splashing nearly $30 billion on infrastructure projects, stimulus measures and payroll tax relief.

Debt will soar to nearly $105 billion by 2023-24, and NSW Treasurer Dominic Perrottet has seized on record low cash rates from the central bank as he promises not to drive the state into “structural deficit”.

Acting on recommendations from the Thodey review into federal-state financial relations, Mr Perrottet has proposed an optional move away from stamp duty to an annual property tax based on land value, with all future owners locked into the levy.

“When it comes to our economy and the biggest impediment on economic growth, the number one area for states are taxes,” Mr Perrottet said.

“The worst which we’ve been speaking about for some time is stamp duty; it is an impediment to home ownership.”

Buyers will get the choice of paying the transfer duty or the property tax, and the rates will differ for owner-occupiers, investors and commercial tenants.

The Thodey report noted that numerous inquiries, including the Henry review and the 2015 Commonwealth Treasury tax review, had found stamp duty was one of the most inefficient and damaging taxes, with costs ranging from 34¢ to $1.07 for every extra dollar of revenue raised.

Mr Perrottet has dubbed it a “response and reform” budget to drive the state’s post-pandemic recovery and plug its $16 billion deficit, predicting a return to surplus by 2024-25.

“There are a lot of numbers but ultimately this budget is about people,” he said. “It is not just about dealing with the pandemic today.”

Like the federal government, Mr Perrottet is hedging his bets on a coronavirus vaccine being available by mid-2021 and international borders reopening by December next year.

Measures in Tuesday’s budget include vouchers for people to spend on hospitality and entertainment, higher payroll tax thresholds for businesses and big spending on shovel-ready projects.

NSW’s economy is projected to shrink by 0.75 per cent before growing by 2.5 per cent in 2021-22, with $25 billion in revenue to be wiped out over four years.

Population growth will effectively hit zero over the next two years, shrinking the state’s revenue pool.

First home buyers could receive grants of up to $25,000 to help cover stamp duty, and the change is expected to bring in the same amount of revenue as the transfer charge.

Despite the proposed switch to land tax, budget documents show stamp duty revenue will grow 11 per cent over the next four years and land tax will grow at a sluggish 0.9 per cent over the same period.

Economist Saul Eslake praised Mr Perrottet for pursuing the politically challenging issue of stamp duty reform.

“I give him kudos for pressing on with this because no other state Treasurer has had the cojones to do it,” Mr Eslake said.

But he warned that the Treasurer risked undermining his own reform by giving people an option to choose between the annual levy or the transfer charge.

“In theory that should make the property tax system fairer. The reality is people who are unlikely to move very often will opt to stay with the present system,” Mr Eslake said.

Steve Mann, NSW chief executive of the Urban Development Institute of Australia, said new builds could be delayed if the move to the annual tax took too long.

“With reforms slated for late 2021, homebuyers could hold off on purchasing until they have more certainty, which could effectively stall the industry completely,” he said.

Business Council of Australia chief executive Jennifer Westacott said NSW was “building a strong business-led recovery”, pointing to the budget’s stamp duty and payroll tax changes.

“While some jurisdictions are talking about reform, NSW is acting,” she said.

“Critically, the NSW budget puts business at the centre of the recovery by unleashing the job-creating power of the private sector.”

Payroll taxes for companies creating 30 new jobs in NSW will be axed for four years, the payroll tax threshold will rise from $1 million to $1.2 million, and small businesses will be given $1500 vouchers to help cover government fees and charges.

The government will trial its $500 million “Out and About” initiative in Sydney’s central business district next month before rolling it out statewide next year, with households receiving $100 in vouchers to spend on hospitality and entertainment.

People will get only one shot to spend the $25 vouchers, and any leftover cash will be forfeited. They will not be able to be used for alcohol, cigarettes or gambling.

Moody’s warned that NSW’s high debt levels, which will more than double over the next four years, would put it at risk of future shocks.

“This will test institutional capacity as it targets fiscal repair,” Moody’s vice-president John Manning said.

Mr Perrottet said NSW had an “obligation to future generations” to use the opportunity of low borrowing rates.

Coal mining royalties will be diverted to the NSW Generations Fund, while the government floats a securitisation of the state’s lotteries tax revenue.

Public servant pay increases have been frozen at 1.5 per cent over the next four years, and Mr Perrottet told departments to cut back spending on travel, events and contractors.

He used his budget speech to describe a horror year for NSW, as Tuesday’s budget marked a year since the first known case of the coronavirus.

“We look to the far horizon, because we have a long road to tread,” he said.

NSW Labor has dismissed the budget, saying it failed to account for the looming economic crisis when JobKeeper ends next year. It also criticised a lack of start dates for proposed new schools and hospitals.

“It’s a tired, flat budget from a tired, 10-year-old government,” Opposition Leader Jodi McKay said.