Considering that tree change? Consider this
Posted by RSVP onThe term peri-urban was new to me, but the lifestyle isn't. Peri-urban is the name the Department of Agriculture gives to the 'lifestyle' acreage of 10 to 40 acres - usually on the outskirts of cities and regional areas.
For lots of people, a tree change is a very desirable lifestyle and many people buy hobby farms prior to retirement as weekenders.
I bought mine some 12 years ago and was able to make the full time move three years ago.
For me, nothing beats the peace, the clean air, the spectacular natural surroundings and wildlife, and the very absorbing interest, in my case, of breeding horses. In addition, a close-knit community is a bonus for a former anonymous city dweller.
However, I've just described the romantic part. There is more than the upside to consider if you want to become a peri-urban.
It's not necessarily cheaper to live in the country
Firstly, obviously there are higher running costs associated with rural acreage than your average home. I'm not talking about council rates - which may even be lower, especially if you don't have sewage or garbage collection - but the myriad of un-thought-of expenses.
There is fencing, and more importantly constant fencing repair. Cattle are notorious for busting fences and even if you don't run cattle, your neighbour may. Believe me, if a bull gets into your garden even once, you'll suddenly become meticulous about fencing. Having horses, I have electric fences and this is expensive. My electricity bill runs at around $800 a quarter.
Water is a constant issue - you may be on tank water at home or need to buy water in times of drought, and dams often need to be built or maintained. Water infrastructure is thankfully tax deductible over a three year period for primary producers.
If you have grazing land, you'll need to slash it in late spring and late summer to promote sweet growth, and harrow the manure (around $350 for five acres). It will need lime if it is a bit acid and you need to check the underlying mineral content of the grass to see if feeding supplements are needed. You may need to pasture improve it or put on some super.
The biggest pest is weeds, some of which are deadly to cattle and horses. I have found that my local council will come and spray for a very reasonable price - but this entails about three visits a year. The rest of the time I pull them out or hand spray.
One source of annoyance is that some other peri-urbans around me just think that it is charming to live in the country - but don't look after their land. They regard their acreage as scenery. They allow weed infestations, rabbit infestations and don't maintain their fences.
This is also of grave concern to the Department of Agriculture. Urbanites with no knowledge of agriculture buy land, and then keep animals and grow plants which could pose a threat to commercial agriculture (worth $31 billion in exports a year). In the case of keeping poultry, ignorance about bird flu symptoms could pose a serious health threat - especially if the land is near a city. The department says around 75% of new diseases can be passed on from animals.
Of course, not all tree changers are oblivious. In many cases, their interest in the natural environment has brought them to the area - and they can be keen land care participants. Tree changers have been a vital ingredient in the success of efforts to restore vegetation along Cooroy Creek inland from Noosa, Queensland.
More lurks and perks
One of the key questions you will have to ask if you buy acreage and either run animals or grow crops is: 'is this a business or not?'
Obviously, if it is a business then all the expenses I listed become tax deductible - as well as other useful deductions such as vehicles, farm implements, etc. The Australian Tax Office (ATO) has a guide on its site called Am I in Business that essentially asks: do you earn assessable income from the farm? If this is the case, you can offset any losses from the farm against other income.
The other question to consider is: how far away is your retirement? And will you be claiming pension benefits?
Until January 2007 only properties two hectares and under (five acres) were exempt from the Assets Test. Larger farms counted as investments. Now, if you have a long term continuous attachment to the land of 20 years or more, and you are making assessable income from the land either by farming or subdividing, it can be ruled exempt from the Assets Test.
If this is not the case and you are considering tree changing as a retirement plan then you might want to buy something in two hectare and under range.
Visit www.superliving.com.au for loads more finance, health and lifestyle information.
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