Hi itsandrew,

Myself (& others) have found it very difficult to find accurate information on the subject, as it pertains to private investors. The scheme is administered by fahcsia, there’s some helpful info here:
http://www.fahcsia.gov.au/sa/housing/pubs/housing/nras/Pages/default.aspx

re: what qualifies you.. there are indeed qualifying…[Read more]

Actually there’s another way.. most banks will take cash as security for a loan.

If the 20% of the IP secured against your PPOR is $100k, when you sell the PPOR, rather than using the proceeds to pay out that 100k, put 100k in a separate account. Then let the bank take that 100k in the account, as security against the 100k they’ve lent you. Then…[Read more]

so long as you pay out the old loan from the new loan it will be deductible…

not_so_lucky wrote:
The installer will still provide me with a receipt, it will just state that I paid him $7,500, but it will not state that I paid gst (if I choose to go down this path). Also, I have already paid a large sum of money to the installer (and paid gst).

I guess your already aware that there’s nothing legitimate about this. Even…[Read more]

Terryw wrote:
Ask if he thinks you should use a trust, and if so which type of trust.Then ask for his reasons why you should or shouldn't use one.

couldn’t agree more… but just to add to that, before you go ahead and decide to create a trust and purchase an IP with it, talk to your accountant about the ramifications of the trust for negative…[Read more]

hi not_so_lucky..

Am I correct in assuming that the issues are the fault of the steel frame supplier? is that who you are considering seeking compensation from?

If their stuff up has cost you (in the region of) $10,000, then offering to go “off the books” doesnt seem like much of an offer.

To answer your question, yes this will effect your…[Read more]

hi jaqui

A PAYG variation would help with the negative cashflow during the year, if your paying any tax that is..

Whether the property is positive or negative at the end of the year.. based on my calcs on an average property your looking to get between $5k and $7k after tax cash benefit, so even if the property is still negative, your still $5k…[Read more]

You’d have to choose either MYOB or quickbooks to ensure compatibility with your accountant. Quickbooks is better than myob for managing personal investments like rental properties. MYOB has a larger market share (more people use it), and can be used in the same way, but personal investment users are not ‘targeted’ as with QB. I would thoroughly…[Read more]

Hi Rob,

I’m not familiar with victorian state law stamp duty and such, so I’m not much help with 1 through 3.

But as regards #4, the short answer is no. If, after 1 through 3, you have (say) 50% LVR, you cannot then use another 30% (going to 80% LVR) as security for your new PPOR and claim the interest on that 30% as a rental property…[Read more]

I’d vote for the offset account..

The only disadvantage I can think of is slightly higher bank fees. but ultimately having an offset account just gives you more options in the future. Conceptually.. and offset account is the same as principle reduction, it just gives you more options in the future.

re: 2010 deductibility:
borrowing…[Read more]

Greg Reid wrote:
I have clients in Melbourne who previously had taken advice by C&N and it has not worked to their advantage. Both are PAYG salaried and little risk of being sued, they now have 3 hybrid trusts with one IP in each.It just looks to me selling a product and fitting the advice to suit the sale.It does not help their portfolio…[Read more]

Hi ijc

Personally I dont think you have anything to worry about.

The tax office will have already benchmarked your `86 property against other comparable properties, I daresay if the high depreciation was going to flag that property for audit, it would have happened already. Inclusion of another property in your tax return will not bring further…[Read more]

Its irrelevant what the previous owner has claimed.. you can only claim the current years decline in value – the 6th year.

jacqui_03 wrote:
Am I best to look at newly built houses (house and land packages) or just established houses built after 1987 – Is there a big difference in the depreciation I could claim?

You will always get more depreciation on a more recently constructed house. even when using the straight-line method, (usually dim val is used) plant and…[Read more]

http://www.ato.gov.au/individuals/content.asp?doc=/content/00183243.htm
see the “where do you get the information” section, down the bottom.

Quote:
If you purchased the property and do not have a record of the construction costs – for example, where the vendor did not provide them – you will need to obtain this information from an app…[Read more]

I’ve spent a little time thinking about this, and I have to admit, I’m unsure why the order in which you subdivide and demolish would be pertinent to whether or not you are in business.

What if the existing building sat astride the new boundary line between the two new blocks? then you would have no choice but to demolish before you…[Read more]

a q/s will still give you 2.5% on the capital works.. a dodgy accountant might look at the total contract construction cost and apply 2.5% to the total rather than depreciating plant elements over a shorter time.

Hi Scab,

In your specific situation, I’m not aware of any specific rules regarding capital works.

What you might be referring to is the 4% rate for > 10 apartments which are used for “short term” accommodation (ITAA97 sec 43-145 )
“short term” is a little ambiguous… because it does say “ie apartment buildings” which arent necessarily short…[Read more]

sorry shangrila.. I’m not really sure on that one, can you be a bit more specific? was it the tax office that told you that?

Hi jacqui,

Unfortunately, its not as simple as choosing not to claim the expenses, and therefore not having to declare the income. from the point of view of the tax office you are using your home to produce income, and its taxable (& you are entitled to claim your expenses against that income).

Declaring the rent isnt that big a deal, because…[Read more]