Research Your Tax Benefits
Research Your Tax Benefits (for the property investor)
If you are a landlord you need to treat your property portfolio as a business. Keeping receipts and knowing what you can and can't claim on your tax return is paramount to managing your bricks and mortar!
TAXING TIMES
You can claim:
- Interest on the loan to buy a rental property or land to build a rental property
- Purchase of a depreciating asset for the property such as an airconditioner
- Maintenance repairs or damage repair to the property
- Preparation of a lease agreement with a tenant
- Works that go beyond repair and provide something new may be able to be claimed as capital works deductions over a longer period
- Stamp duty charged on the mortgage, loan establishment fees, fees for a valuation required for loan approval and lenders mortgage insurance are generally deducted over a longer period
- The cost of repairing defects, damage or deterioration that existed when you bought the property can be claimed over a longer period
You can't claim:
- Deductions for rental properties that are not genuinely available for rent
- Interest on a loan you use to buy a home that does not produce income or when you start using the rental property for private purposes
- Interest on the loan that you may use for private purposes such as buying a car, speed boat or holiday
- Travel expenses when the main purpose of the trip is a personal holiday rather than to inspect the property
Most importantly, you need to consult a tax agent or accountant for comprehensive advice to maximise your deductions. Most accountants will advocate using a quantity surveyor to provide a comprehensive report that will also ensure you get the most from your property portfolio tax benefits.
BUDGET NEWS...
Finance News: 12 May 2010
The financial services industry has broadly welcomed the Federal Budget, particularly those elements going to providing tax relief on savings and the creation of Australia as a financial services hub for Asia...
Investment and Financial Services Association (IFSA) chief executive, John Brogden said the Budget would greatly advance Australia’s ability to become a global investment hub, while the announcements around reducing the investment withholding tax and establishing a new mandated investment trust regime would all advance Australia’s reputation internationally.
For its part, the Self Managed Superannuation Fund Professionals Association (SPAA) welcomed amendments to the superannuation legislation allowing the Commissioner for Taxation to exercise discretion on excess contributions.
SPAA chief executive, Andrea Slattery said the amendment corrected a major flaw in the current system. By comparison, the accounting bodies provided only luke-warm support with respect to the tax initiatives contained in the Budget.
The Institute of Chartered Accountants in Australia said the measures aimed at simplifying individual tax returns represented the start of a serious tax reform agenda for the country.
“The announcement of a standard $500 tax deduction alongside a simplified personal tax return process, will deliver average compliance cost savings of around $300 a year for over 5 million Australians who currently visit a tax agent every year,” the Institute’s Tax Counsel, Yasser El-Ansary said.
However he said the jury was out on whether or not a $500 deduction would be enough to entice most taxpayers to tick the box and accept the offer.
Similarly, the chief executive of accountantsRus, Adrian Raftery claimed the $500 standard tax deduction announced in the Budget was a fraction of the average currently claimed by taxpayers.
“The average tax deduction claimed by an individual taxpayer is $3,311 according to the latest statistics from the Australian Taxation Office,” he said.
SOURCE: Money Management |
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