Forum Replies Created
- Originally posted by AusProp:
surely if you hadn’t cliamed it you would just adjust your returns to cliam it = 100% claim for the depreciation and only 50% assessed on the CGT. so it should all be good news?
Hi John,
Sounds good in theory but you are only entitled to back date your last four tax returns whereas CGT can be calculated over a longer timeframe than this.
What is intriguing is that the ATO requires taxpayers to substantiate their depreciation claims via a QS or similar – I wonder how they will determine the depreciation that may not have been claimed?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Milly:Three months notice you have to give.
Hi Milly,
The three months is a standard clause in the Queensland REA management agreement paperwork but there is a little clause that says the notice of termination can be 30 days if agreed to – won’t help a lot now but it is worth remembering for next time.
On the subject at hand, and if you do not want to change PMs then I suggest a phone call discussing your concerns, followed by a similarly worded letter. This way you have on record your desire for better service and if push comes to shove you have proof of your contact with the PM.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by redwing:PS- Derek, it was my Clarkson IP, pretty steep, i thought.
Must be the outer limits who have a misconstrued opinion of their worth.
One Rockingham agent thought 9.5% of gross rental income (yes you read that correctly) was a fair letting fee. Needless to say I didn’t continue our discussion.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by depreciator:Now, here’s something surprising. Apparently if a property was purchased post May 13, 1997, and it is eligible for depreciation on the building, the amount of depreciation that could have been claimed has to be deducted from the cost base upon sale for CGT calculations even if it hasn’t been claimed.
Hi Scott,
My new accountant had heard this one too – he may well have seen the same ‘heads up’ notification.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
HI Diane,
The lender will also consider your ability to service the loan by looking at your income level, which includes your rental income. Some banks only recognise around 75% of rental income whereas HSBC, for example will accept 100%.
A good broker will be worth their weight in gold at this stage of proceedings as different lenders have different products, servicing rules and so on. A borker with access to numerous banks will have the right product for you and your situation.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
HI Nathan,
Here is the link GP was referring to.
https://www.propertyinvesting.com/forum/topic/10172.html
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Old Bat,
Retirement homes/villages tend to be more suited for the asset rish investor who is only chasing cashflow.
Many lenders get a little nervous about retirement villages and as such you may well need to put in more than standard (20% w/o LMI) residential deposits. Most lenders are currently reluctant to allow these properties to be used as security for other lends so as a long term contributor to the future expansion of your portfolio they are questionnable.
The aging population trends indicate these properties could well have a future market but the market is relatively untested and as such future growth and saleability may be questionnable.
Costs can be high if the village is a fully serviced and you will need to check the clauses in the management rights if their are managemement agreements in place over the unit.
Also suggest a search on ‘retirement’ as the topic has come up a few times before.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Daltoid,
The repayments on an interest only loan are less than the repayments for the same size P & I loan. This enables I/O disciples to generally hold more property than if they were making P & I repayments.
Bear in mind it is only the interest component that is deductible – the principle component isn’t deductible. As such you do not gain anytax advantages with a P & I loan over an I/O loan – but you do gain increasing equity.
I would recommend you set up an line of credit using the equity in IP1 for the deposit and costs for IP2 and retain your cash in an account offset against IP1 – this way it will reduce your interest bill and allow you to retain it and have ready access to it should you ever need it.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by AusProp:Las Vegas… someone was talking about this a couple of days ago saying there was a huge scam and US people were moving in on Aussies as prime targets (being property obsessed as we are). wish I could remember where I heard it….
Hi John,
You probably heard John Kobelke – WA Minister for Consumer Affairs sepakign about this on a radio news bulletin durig the week.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Eenypl,
Recommend you do a search on Broken Hill – according to API there were 545 sales in BH last year – seems lots of cashflow investors have collared the market there.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jo,
In short – no, if it is good buy then it is a good buy irrespective of its age, apart from any maintenance and inspection issues.
All purchases need to be evaluated on the fundamentals and any depreciation ‘benefits’ should be considered as being the icing on the cake, and not a part of the cake.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Andrew,
Provided it was available for market rate rent all year you can claim all expenses.
Don’t forget you will need to be able to substantiate the claim if the ATO comes knocking – advertisements, advertising bills, records of phone calls to managing agent etc.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Dragons,
I/O loans do have a limited life (used to be typically up to 5 years – though this is/has changed with the ongoing deregulation of the market) after which banks ‘expected’ you to convert to principle and interest repayments.
At the end of the I/O period go and see your broker and get the I/O period extended with your initial lender and, if they say no, find another lender.
Whether or not I/O or P & I is better is ultimately up to you. We are I/O with our investment loans and will continue to do so while we have non-deductible debt. Thereafter we will reconsider our options.
I/O investors tend to have a growth focussed investment belief and use I/O to reduce outgoings for individual properties thus usually enabling them to hold more property for the long term growth benefits.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Alf,
One thing valuers really detest is when the ‘comparable sales’ you have identified are not that comparable. In essence make sure your information is fair, valid, reliable and up to date.
I have had success in the past by ringing local agents in the area to find out some details about recent comparable sales that haven’t yet reached the stats and provided this, and agent contact details, to the valuer to guide them in their deliberations.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi tcarrisk,
Welcome to the forum – depedning upon which state you are in you may find other sources of information – as a rule of thumb somresearch bodies are starting to charge for their information.
Try http://www.domain.com.au/UserServices/searchAPM.aspx?mode=subsell
as they have a suburb snapshot section that is freely available. You can also do google searches for the area in question.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
The form you require for PAYE tax payers is available from the ATO at http://www.ato.gov.au/corporate/content.asp?doc=/content/43572.htm
As others have said the commissioner is not obliged to allow the payroll deductions and as such it is in your interest to ensure you do not crib your tax responsibilities. I prefer to leave some deductions up my sleeve for the end of financial year return and as such get to enjoy the benefits of a reduced pay period tax rate and the end of financial year lump sum.
Electronic submission results in a faster turn around time and if your situation is relatively straightforward then you can submit the application without the assistance of an accountant. Ultimately it depends upon your situation and level of confidence.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
HI Mike,
Anb offset account can allow you to own your own home faster – the speed at which you achieve this is relative to the amount in your offset account and the size of the loan.
We deposit all of our income into an account offset against our home, pay everything by credit card, our various loan interest bills are paid electronically when they are due and we clear the credit card bill monthly to maximise the interest reduction to our home loan while ensuring we do not get stung with high credit card interest bills.
If you do want to start investing you may find you have sufficient equity in your current home at the moment to use for deposits and purchasing costs.
Create a line of credit for this (as distinct from a line of credit to pay the home loan faster) and then secure your investment properties with self supporting loans. It is a myth that you need to own your own home before you start to invest – the costs of waiting can be significant.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jo,
New stove would be classified as replacement and would be depreciated – (well it was 8 years ago when our hot water system died) – if however repairs could be effected then the repair bill and parts would be deductible.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
Just made the last payment on youngest daughters braces so that the total bill fell inside one financial year – takes us over the $1500 medical expenses threshold and provides a 20% rebate after the threshold is reached.
Have also paid a few bills (body corporate, phone bills etc) in this financial year as the new tax scales come into play on July 1 and my deduction is ‘bigger’ this financial year than it will be next year.
Prepaid airfares for an ‘inspection’ visit for the same reason as the previous paragraph.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Shane,
No problems – pleased to be of assistance.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
