Overall market fundamentals are buoyant with investment activity strong and the leasing market gathering momentum, which should provide the impetus for a turnaround in incentives and rents. “Infrastructure and land availability continue to be catalysts for industrial development and increasing site values, in both established and emerging areas
Conveyancing Solicitor growing population pressures have resulted in increasing amounts of industrial land being rezoned for residential use. This has had a pronounced effect on the value of industrial land particularly in south Sydney and inner Sydney suburbs.
Mixed use rezoning has further accelerated the erosion of traditional industrial land, which allows industrial areas to be redeveloped for residential use.
Thus if there was previously a review opportunity and the tenant refused to pay the GST or the tenant is not entitled to an input tax credit (eg. financial institution) or the tenant was slightly input taxed then the Less or must pay the GST with no opportunity to recover it from the tenant.
The Less or cannot even claim the input tax credit for the GST paid. In simple terms due to GST the Less or loses one-eleventh of the rental for the property. Thus the measures being introduced by the government do nothing to stop one party being disadvantaged.
The Property Council of Australia is currently lobbying the government with the following solutions to the current problems of GST and long term leases.