Sorry Dloy.. I’ve changed the links – the new video is from youtube and changed the photos for the actual locations on google maps – pretty spooky actually

The usual rules will apply.

As regards the motor vehicle the 4 methods of calculating your deduction are available – though your probably only eligible for 2 of them, and the rate per km will probably give you the best deduction. You could use the log book method, but it’s unlikely you would get a reasonable percentage.

As regards the trailer,…[Read more]

Sorry stasani, I dont really understand your question?

What do you mean by “apparently my provider charges differently?”

and, whats stopping you including a flat charge for weekly rent and power / bills ??

Basically no. Tenants and homeowners pay the same amount per kilowatt hour.

The power / gas / phone co does ask if your renting when you call them to have services connected. But that’s only so they can verify with the agent that you actually live at the address your having the power connected to.

Hi Glenn,

Luke is right about the offset account – dont use a redraw.

Re your wife’s lower taxable income, you can not claim her costs in your tax return, even though you’ve paid for them.

The best way to explain this situation is by example. Say for three consecutive years her salary is $50k, $0k, $50k, and in each of those years her rental…[Read more]

Hi saratoga… welcome aboard

The way I see it this forum is probably the best place to “get some knowledge under your belt” – so please don’t apologize for asking questions.

In theory the cost base for CGT on the front block would be it’s current market value if it were already subdivided. I say “theory” because there’s always a range of what…[Read more]

In my humble opinion… The federal government has encouraged negative gearing because it’s cheaper to give out the tax breaks than it is to fund public housing projects. That said, there isn’t any doubt amongst economists that the tax breaks are fueling value growth, to the point where property values over recent decades have far outstripped…[Read more]

Hi gomez,

The concept that your up against is that whilst it’s easy to give an ‘average’ amount of depreciation for a property of a particular value, giving an estimate of depreciation for a particular property requires a lot more information. For example, if I asked you to estimate my weight given that I’m a 30yo male, the only answer you could…[Read more]

Hi ALSK,

Sounds like a tough situation.

The agent can’t really do anything for you, because your not on the lease. Your best bet is to convince (read coerce) your ex into breaking the lease and recommending you as the new tenant. If you play the game right the agent is very likely to let you sign a new lease in your own name.

You’ll be able to…[Read more]

Well..

If it was transferred on 1 June @ a market value of $360k, then you would incur a capital loss of $14k ($7k each) which isn’t deductible against your other income, only against any other (or future) capital gains.

So then if you sold in 2 years for $400k. There’d be a capital gain of $40k, ($36k for one of you, and $4k for the other) So…[Read more]

Hi Daniel,

Whilst ‘prima facie’ it appears to be just a ‘percentage change’ – from a tax perspective your selling the property to yourselves. So whilst some states will give you a concession on stamp duty, the transfer is still a capital gains tax event.

Because no cash will change hands the cgt up to the day the property is transferred cgt…[Read more]

Hi Billy,

You need to determine your UK income according to UK tax law. So depreciation would have to be calculated according to UK tax law. Unfortunately you can not apply Australian Tax Law (or concepts thereof) in determining your foreign source income, the amount needs to be determined according to the relevant local laws in the country of…[Read more]

It’s a common misconception amongst accountants that property investing can not be considered a business activity. It can. It’s just that it’s unusual in the current climate, for an investor to meet the criteria.

I’d claim it, but expect the ATO to question the deduction, when they do… write to them (an accountants letterhead wouldn’t hurt) and…[Read more]

You’ll definitely be able to get your hands on a “proper” agreement free of charge. Although you do need one which is applicable to your state, as I believe (not sure) the residential tenancies act differs state by state.

For example, here in WA all property agents use the ‘stock’ forms from reiwa (real estate institute of wa) I dont think…[Read more]

Hi Terry,

Question 1:
In brief.. it’s complicated. Usually where you have a depreciation schedule prepared, to get the maximum advantage in the short term you would use a diminishing value method. In the case of your property, that time has passed. However you can still claim 2.5% of the cost of the capital works every year, for the first 40…[Read more]

Oh ok.. well admittedly:$10k repairs x 7% interest x (6/52weeks) x marginal rates = not muchSo if you didn't bother to claim the interest for that 6 week period it wouldn't make that much difference. But… The refinance is going to split the loan into it's different purposes right? So the balances of each purpose needs to be determined anyway,…[Read more]

I'm not sure I really understand. I dont think it will make any difference at all when you draw the funds, because taxdeductibility of the interest is based on the purpose you borrowed the money for, not the asset the borrowings are secured against.The $10k your drawing is for repairs for another rental right? So the costs you pay with that $10k…[Read more]

Well, hey – if the renovation is worth while then great, and yes the borrowings would be tax deductible. But if you do it with an aim to 'undo' the situation your in, then it just doesn't make sense. Your goal is to pay the least interest possible on your PPOR. Borrowing more to renovate the rental means you pay more tax deductible interest, but…[Read more]

I agree with scott..remember that cash doesn't need to be distributed but profit does, so if the trust makes a profit of $100k, the cash it's earned can sit in the trust's bank account, but that $100k profit is distributed in the tax form to the beneficiaries.

chrisaus wrote:
I think I have made a huge mistake putting all that cash down for my investment property. The way I see it, I should've gone with a loan that has an interest offset account, put down the minimum to avoid lenders mortgage insurance and then put the rest of my cash in the interest offset account.

It's easy for things to become…[Read more]