Ed Chan from Chan & Naylor stumps up to answer some questions about land tax from Charlotte.

I ask Margaret Lomas about the fairness or otherwise of the compensation you get from Government if your land is resumed and what can you do if you are not happy? Margaret tells us about her personal family experience in this area.

A very successful investor and property renovator, Jane Slack-Smith is our feature guest this week. Jane talks about her early memories of growing up in a family of renters. How she initially trained as a mining engineer but started out as a rentvestor and how she built her portfolio.

This market just continually surprises, doesn’t it? You look at the growth in Sydney and Melbourne, and there were so many predictions at that start of the year that it just wouldn’t continue, but it has. How do you get on in this kind of market? What do you do? How do you get in there?  Michael Yardney answers those questions and more.

Patrick Bright has some thoughts on how tough it really is for first time buyers and he has some hard advice.

 
Transcripts:
Resumed properties are under valued - Margaret Lomas
Kevin:  I was interested to read a story recently – actually, it came out of the ABC – about a property owner in New South Wales not being fairly compensated for resumption of land, whether that’s for some kind of development. We hear about these stories quite often. Government is very quick, of course, to come out and say, “Oh, no, we fairly compensate them.” I want to talk to Margaret Lomas about this from Destiny Financial Solutions.

Hi, Margaret?

Margaret:  Hi, there. How are you going?

Kevin:  Well, thank you. I know this is a particular bee in your bonnet. Have you struck this on a number of occasions, Margaret?

Margaret:  I’ve actually had personal experience with this a long time ago when my father owned a business. He had had that business for a good 30 or 35 years, employed about 20 or 25 people, and owned the land and premises in which that business operated. So the business rented it back from him and my mom.

As he was getting up closer to retirement– I think he would have been about 58 or 59 at the time– the decision was made to put a main road right through his land. Initially the main road was going to go in front of his land, which would have given him an advantage in business. But they decided that they would shift that main road a little bit, and it ended up going straight through his land.

Now, what they actually did was the amount of money that they offered him to resume his property was some half of what it was really worth. He at the time had an independent valuer who stated what it was really worth.

What the government actually said to him at the time and I remember it so clearly was that that’s fine, he could fight them in court if he wanted to, but what they would do is hold it up in court for 10 years anyway and at the end of the day, he probably wouldn’t win. So he could either shut up and take the money or he could try and not take the money, in which case they would put the road there anyway and force him out.

Now, to me that’s bullying. What ended up happening to my dad was because he had all of these people working for him, he felt committed to them, he actually moved to rented premises at the time. He couldn’t afford to rent something in as good a position as what he previously had, and within two years, the whole business was in liquidation.

Kevin:  As you say, that’s straight up bullying. There’s no question of that.

Margaret:  It’s bullying. So 60-years-old and he basically came out of a 35-year-old business with nothing because of those tactics. He had nothing to sell because one by one, he had to let the employees go. He couldn’t get the passing trade that he used to get. No one could find him anymore. He was in the back streets, instead of close to a good road. So it’s very sad.

But, unfortunately,