Year End Strategies For Property Owners

The end of the financial year is approaching, and it is important to be prepared. This will ensure there aren’t any nasty surprises and as much cash as possible can be protected. Here are some tips to keep in mind:

  1. Personal Expenses
    Be careful and ensure that any claims or interest on borrowing for investment are separated from interest on borrowing of a personal nature.
  2. Substantiate Your Claim
    Keep all receipts to prove any deductions and be able to show why the expense was incurred to derive assessable income.
  3. SMSFs And Property
    Consider moving Business Real Property into a SMSF. This is a good way to free up some cash
    coming into tax time.
  4. Renovations By Previous Owner
    If the renovations are identifiable and itemized in a depreciation schedule, then it is possible to be eligible for a deduction for depreciation on the cost of improvements by a previous owner.
  5. Capital Gains Tax
    Ensure any capital gains on the sale of property are properly recorded. The ATO are keeping an eye out for any undisclosed capital gains from disposing of assets to invest in superannuation.
  6. Fixtures And Fittings
    If fixtures and fitting cost less than $300, it may be possible to claim a tax deduction.
  7. Self-Education Expenses
    Keep all receipts and documentation relating to self-education, such as seminars and investment related books and magazines, in order to qualify for tax deduction.
  8. Use A Quantity Surveyor
    There are benefits to having a depreciation schedule prepared by a qualified quantity surveyor. They could help gain a significant tax deduction for depreciation. The cost of employing such a surveyor is tax deductible and will help back up a capital allowance claim.
  9. Pre-Pay Interest
    Depending on the lender, it is possible to pre-pay interest to defer the payment of tax. This is dependant on possible future income, interest rates and cash flow impact.
  10. Repairs To Property
    Be aware that although the cost of initial repairs at the time of purchase is not deductible, expenses for repairs further down the track are. They must relate, however, to wear and tear or other damage incurred as a result of earning rental income.
  11. Short Term Holdings
    If a property has been renovated with the aim of selling it at a profit in the short term, the ATO may tax it as if it were a ‘profit making scheme’. If this occurs, it is not possible to take advantage of CGT concessions.

Comments are closed.

NEWS

NOTICE: Regarding Unsolicited Emails

We have recently learned of unsolicited emails that are being sent out, claiming to be “Fusion Financial Services” which typically contain the subject line “Invoice Is Ready For [Insert Name].

While the sender may appear to be The Fusion Group, we want to confirm that this is not the case. The email includes a virus in the form of a Word document, claiming to be an invoice from Fusion. In the event that you receive an email that fits this description, close the message immediately and report it as spam.

Thank you,
The Fusion Group

Controlling your Self Managed Super

Self Managed Super Funds (SMSFs) continue to grow in popularity. What is the large appeal that prompts so many people to go their own way despite all of the obligations and responsibilities of being a trustee – and being regulated by the Tax Office? … more

Are Your Inactive Bank Accounts at Risk?

We’ve all heard about the “lost billions” sitting in idle superannuation funds around Australia but are you aware of what’s happening to hundreds of millions of dollars sitting in “inactive” bank accounts? Read on, you may be very surprised. … more