HappyBandit,

No rollover relief on investment properties in Australia. The only rollover relief is available to active assets of a business and it specifically excludes assets that have been used to produce rental income section 152-40(4)(e).

julia@bantacs.com.au

Dave,

Yes the excess interest if it is negatively geared.
In ID2002/764 the ATO clearly states that, from 1st July, 2001 Section 160AFD allows the interest, borrowing costs etc. on an overseas rental property to be offset against Australian income to the extent that it exceeds the overseas rent received.
Note this is rental income after the…[Read more]

Steve,

What The Borrowed Money Was Used For Determines Deductibility:
Traditionally, the interest is only claimable on a loan where the actual money borrowed is used directly to produce income i.e. buy the income producing property. The Roberts and Smith case of July 1992 has changed this. In this case a firm of solicitors borrowed money to pay…[Read more]

Chrisalt,

It is dangerous to use a line of credit facility on a rental property loan when you will be drawing funds back out to pay private expenses. Based on the principle that the interest on a loan is tax deductible if the money was borrowed for income producing purposes, the interest on a line of credit could easily become non-deductible…[Read more]

Ben,

It is dangerous to use a line of credit facility on a rental property loan when you will be drawing funds back out to pay private expenses. Based on the principle that the interest on a loan is tax deductible if the money was borrowed for income producing purposes, the interest on a line of credit could easily become non-deductible within 5…[Read more]

Mick,

You can claim for these but you may have to apportion the expense for any business use. I have a free booklet on rental properties if you are interested.

julia@bantacs.com.au

Kate A
The following is an extract from an article I wrote on the subject.
The score card so far:
1998 – ATO issues ruling TR98/22 claiming that the only purpose for capitalising the interest was to reduce the debt on the private residence so the interest on the capitalised interest was a cost of the private mortgage not the rental property…[Read more]

Eigenturn,

Your accountant is right travel costs before you purchase a property slip through the cracks as the legislation is very specific about what costs add to your CGT cost base and travel costs are not one of them.
Many have tried to be considered in the business of rental properties withou success. You at least need to have 3 rental…[Read more]

Hi Corrine,

I can assist you. I have a practice on Bribie Island Road. If you send me your e-mail address I can send you some reading on CGT and Rental properties.

Julia@bantacs.com.au

Missy,
As it was an out of court settlement you friend cannot use the rollover relief on marriage breakdown.
So your friend aquired half the house 10 years ago at half the original purchase price costs etc and she acquired the other half 4 years ago at the market value then plus stamp duty & legals on the transfer.
Her husband should have paid CGT…[Read more]

Digger,

I tend to agree with your accountant. Why don’t you apply for an ATO ruling on the matter. You will have a water tight answer in 28 days. The form is available on the ATO web site. You just need to describe the arrangement as you have here. They will ring you if they need more info.
There is too much money at stake. In investing you…[Read more]

Bruce,
You need to read TD92/148 on the ATO web site if it doesn’t appear readable below;
TD 92/148

FOI status: may be released

Taxation Determination

Income tax: capital gains: is there a disposal and an acquisition where joint owners of a block of land subdivide that land into two smaller blocks with each owning one block?

This…[Read more]

JimboJames,
It is not worth paying a quantity survery unless the property (if residenital) was built after July 1985 as it is the building depreciation that makes it worthwhile. Also Quantity Surveyors are not trained in tax law. The following is an extract from recent article I wrote on the subject:

Before you spend money on a quantity…[Read more]

itsamoorey,

At first I wasn’t sure whether you lived in Australia or overseas. As I don’t follow football it is still no obviouse but I will assume there are no Wallabies in NZ so you are a citizen of Australia.
First you need to e-mail me at julia@bantacs.com.au for a copy of my overseas booklet which covers all your questions at length and…[Read more]

Jan
My e-amil address is julia@bantacs.com.au

Julia

Matthew,
Go to ATO Web site and read the following rulings TD2000/13 & TD2000/14 http://www.ato.gov.au. Its a start otherwise you won’t believe me when I tell you how greedy the ATO will be. Basically only one of the houses will be exempt as your main residence.

Julia

Sushar,

No reason needed for section118-145

Julia

Pices133

It is a normal transfer at market value normal CGT ramifications. Assuming the properties are only used as rentals not as business premises. If business premise they would be active assets so more CGT concessions and rollover releif may help.

julia

Secret Plans and Clever Tricks – Divorce Rollover Relief
The rollover relief that is available, under section 126-5, to couples facing divorce means that assets can be transferred by one spouse to the other without any CGT consequences. If rollover relief does not apply section 116-30 will deem the transfer to take place at market value which m…[Read more]

An Australian Tax Return will be required. Losses on the property are quarantined as a carried forward loss that will be offset against the income you first earn when you return to Australia. So try to make your first year a full financial year so you can utilise the losses in the maximum tax bracket. If your intention is to be gone for 2 years…[Read more]