Housing Affordability in Australia: The National Rental Affordability Scheme v. Public Housing and Welfare Programs

The National Rental Affordability Scheme (NRAS) was introduced by the Federal Government of Australia, on the 1st July 2008. Whilst the primary aim of the scheme is to provide new dwellings for low to middle income Australian families, there is also the added bonus of a tax incentive program for property investors. In contrast, whilst public housing and welfare programs are not accompanied by tax incentives for property investors, these are also generally considered as suitable options for providing affordable rental housing. The purpose of this research paper is to undertake a comparison of NRAS against other welfare programs, such as public housing and to evaluate the long term viability of these programs and schemes. It is argued, that in the long term, schemes such as NRAS, which are accompanied by tax incentives for property investors, are able to provide a more permanent solution to the housing rental affordability issues within Australia

Regulatory Theory Applications Underpinning the National Licensing System for Educational Requirements in Property Licensing

In July 2008, the Council of Australian Governments (COAG) agreed to establish a national licensing arrangement for seven occupational areas, including the building and property sector licensing, with respect to builders, property agents, conveyancers and valuers. The aim of these reforms is to establish a more uniform licensing system within these jurisdictions. Currently, these licensing requirements are managed under the auspices of individual state and territory Offices of Fair Trading. However, despite uniformity in the choice of regulator, the licensing provisions themselves are not uniformly designed, or enforced. For example, in New South Wales, the regulation of property agency is part of the Property Stock and Business Agents Act 2002, and the associated regulations. The purpose of this research paper is to analyse the different State and Territory laws and regulations applicable to the educational requirements for property agency licensing and to explore appropriate governance requirements for a uniform model of educational qualifications. The paper uses regulatory theory applications to evaluate the current educational requirements for the property licensing systems operating within Australia. It is argued that a national model for educational qualifications for licensing is feasible; however, transitional rules will need to be implemented to allow each jurisdiction the opportunity to phase-in the recommended changes gradually

The Value of Education as a Pre-Requisite for Occupational Licensing in the Built Environment

During the last 50 years, education for the built environment professional in Australia has undergone many changes. The profession encompasses construction, project management, property agency, valuation, engineers and architects. Within Australia, each state and territory has a range of regulatory bodies and professional associations to monitor and enforce compliance and licensing relating to educational requirements. Professional licensing requirements often drive tertiary education requirements. This research paper examines the need for compulsory education in the property and construction industries. Additionally, emphasis on the fields of knowledge embedded within the course curriculum, and the requirements for work experience are discussed. The research is complemented with data from New South Wales and the governments’ purpose for initially introducing compulsory education, and the subsequent amendments thereafter. It is argued that education as a pre-requisite for occupational licensing provides many benefits for the end user. Furthermore, with the changing nature of the work environment, education is viewed as a convenient vehicle to deliver the needs of the consumer. The paper concludes with an evaluation of the current regulatory controls on the educational requirements within the property and construction sectors

White Collar Crime and Property Agents: A Selection of Convictions Involving Trust Accounting Fraud

Property agents in New South Wales are entrusted with the responsibility of monitoring and accounting for all trust money held on behalf of their principle, for example the landlord and vendor. This procedure includes, but is not limited to the receipting and banking of trust funds, correct allocation of the money into the ledger accounts, and the appropriate accounting of trust funds to their principle. During the last decade, there has been a steady increase in fraud with agency's trust accounts. These identified trust account deficiencies and actions of dishonesty have been disguised by licensees and their employees using various methods of application. Literature suggests white collar crime is 'those illegal activities that occur in connection with a persons job or work' (Sutherland 1939). The purpose of this research paper is to examine a selection of court cases which relate to trust accounting fraud. The aim of this research was to identify any trends as to why the crime was committed. An Occupational Corruption Equation was developed and mapped against the court cases to determine a relationship with any trends which led to the misappropriation of those trust funds. The research concluded that the ready availability of trust funds provided a temptation for the offenders, who displayed little regard for the laws and ethics of their behaviour

The Role of Education for the Valuation Professional

Property valuers are specialists who undertake an important role in the Built Environment. Their role can include determination of rent reviews, valuation of properties, portfolio reviews for investment properties, valuations for estate matters and property ownership valuations. Mandated education is a pre-requisite for the licensing of valuers, and with added restrictions depending on whether the level of qualification held is an Advance Diploma, or an Undergraduate degree - both qualifications requiring a major in Valuation subjects. This paper is to clarify the educational aspects placed upon valuers where mainstream tertiary pedagogy was initially considered adequate; however, in later years the requirements changed to an undergraduate degree qualification. Therefore, the curriculum design for mainstream valuation courses is analysed and compared between the vocational sector and universities. It is arguable whether it is the teachings of the epistemology of valuation, or the assessment methodologies which steer the property industry to nominate the undergraduate degree for full valuation recognition and licensing

Capital Gains Tax for Real Property: Why is this tax system so complicated?

In Australia, a Capital Gain calculation is applicable on the disposal of real property. However, there are some specific exemptions, such as the family principle place of residence, and rollover provisions. The Australian Taxation Office has identified taxpayers’ compliance with capital gain obligations as a significant risk. For instance, taxpayers incorrectly categorising or calculating their capital gain. Interestingly, prior to 1999 only one method for calculating capital gain existed, and yet now with our “simplified tax system” there are 3 different methods available. Since 1999 with the release of the Ralph Report and more recently the Henry Tax Review (2010), various recommendations were proposed to improve this section of the taxation system. It is argued that the complexity of the capital gain calculations, particularly with the infrequency of transactions which occur over long periods of time, and compounded with complex transactions, has contributed to the taxpayers incorrectly reporting their Capital Gain informatio

The Ethical Considerations for Occupational Licensing in Property - Why is White Collar Crime on the Increase?

There are various property agency laws and code of ethics which provide appropriate standards of behaviour for the property agent. The property agent is placed in a position of trust and there is a general expectancy from the consumer that the agent will act in a diligent and professional manner. However, there are many instances where consumers have lodged complaints against their dealings with real estate agents, and in recent times the consumer complaints have continued to increase. These complaints include non-disclosure of a vested interest, misrepresentation, unethical conduct and fraud. Therefore, the aim of this research is to analyse selected court cases in New South Wales, Australia, with regards to white collar crime. The purpose of the research is to obtain an understanding of the mechanisms involved in the increase for white collar crime and if any preventative measures can be implemented to lessen the impact for the consumer

Regulatory Theory and Protection of the Principal: White Collar Crime Fraud in Occupational Licensing for Property Agents

Documented increases in trust accounting fraud indicate that there is a clear need to enhance consumer protection in the property industry. During the last 100 years, regulatory policy has been developed to exemplify the standards for social responsibility and ethical behaviour between property agents and their principal. Regulatory theory argues over the necessity for regulation. The Positive theories of regulation examine the reason and need for regulation, whilst the Normative theories of regulation will generally include transparency, predictability and credibility for the regulatory system. With regards to property agents and their principal, the government is also interested in overcoming information asymmetries. The research methodology in this paper utilises regulatory theory concepts to research and identify the problematic areas relating to trust accounting fraud. The suggestion of a correlation between occupational licensing requirements and an increase in the number of licenses issued, and also changes within the educational requirements for occupational licenses was considered using data from New South Wales property agency licensing. The research findings indicated some correlation with the increase of new licence and certificate applications, and trust accounting fraud. However, because of limiting data available ongoing research into this problematic area is required before rendering definite conclusions

The Application of Taxation Benefits and Incentives for Green Buildings

Australia's National Strategy for Ecologically Sustainable Development endorses the establishment of taxation systems that take into account the social and environmental costs of resource use. In the context of the construction industry, the Green Building Council of Australia similarly promotes the concept of Ecologically Sustainable Development (ESD) and recognises the need to integrate economic instruments with sustainable practices. Historically, taxation incentives for ESD are available to the developer who outlays the funds as part of the development and construction process. However, the Green Building Council of Australia observes that 'developers tend to focus on initial costs, rather than costs over the lifecycle of the building'. The purpose of this paper is to undertake a textual analysis of current and proposed legislation and policy instruments at the Commonwealth level to critique the distribution and application of tax incentives available to stakeholders in a commercial building. It is argued that some of the taxation incentives are of benefit mainly to the developer, since these incentives are primarily targeted towards the initial costs of the building rather than the life cycle of the building. Therefore, it is questionable whether this focus accords with the policy and intent of Australia's ESD strategy. The research concludes with recommendations for changes in the application of taxation benefits and incentives for green buildings

A Comparative Analysis of Australia's Sinking Fund Governance within a Strata Scheme

In recent years a number of issues have arisen within Australia's built environment regarding strata title sinking funds and their relationship to the standard of housing stock. In particular, focus has centralised on the emerging problems associated with inadequately maintained amenities in strata title buildings. Primarily the purpose of the sinking fund is for long term capital improvements and maintenance relating to the common property of strata schemes. Therefore, if the sinking fund is inadequately costed and budgeted, the consequential impact on depleted amenities in strata schemes will invariably lead to: poor quality maintenance; deterioration of common property; lower standard of living for the occupiers ; potential loss of appreciated value on the real property; and also a lower rate of return for the property investor Currently, the regulatory regime applying to sinking funds is established at the state and territory level and the varying regimes demonstrate significant inadequacies and inconsistencies. The purpose of this paper was to undertake a national comparative analysis of current and proposed legislation applying only to sinking funds, in order to evaluate the potential effectiveness of the regime