I may be jumping a gun here since its only April however I dont want to face any nasty surprises when the time comes. Also as I only purchased my first IP in January, I dont really have any practical experiences with IPs implications to my tax income.
So from my reading on this topic I gather that all these should offset against my total tax income (job + IP incomes) to create new tax income:
– property management fees
– all repairs & rates (council, body corp etc)
– bank’s interest on the mortgage
– inspections (pest, buidling insp., depreciation agent’s fees etc)
– conveyancing costI am pretty clear aboout those but would appreciate some more info about say:
– travel & accomodation costs related to IP purchase (ie. bought property far from where I live and had to travel there prior purchase)
– loan establishment fees ?? and what exactly are those ?? i was charged loan application, loan stamp duty, search & registration fees and LMI
Any help here would be greatly appreciated.
Thank you
Dan
Hi Dan,
Suggest you download a copy of the ATO’s Rental Property Guide.
http://www.ato.gov.au/individuals/content.asp?doc=/content/42782.htm
It will address your questions for you.
PS Congrats on the purchase.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958I don’t think you can claim travel expenses for a property you didn’t own at the time of the expense.
Borrowing expenses can be claimed over 5 years, not all at once.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I claimed a portion of it with no problems many years back Terry?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi Dan,
Just adding to previous comments.
Borrowing costs are deductible and apportioned over five years or the life of the loan, whichever is the less. As such if you buy and sell the property within a five year timeframe you could claim more than the 20%/annum.
Charges listed as borrowing expenses are loan establishment fees, title searches, fees & costs for preparing and filing documents, mortgage broker fees, mortgage stamp duty. Lenders mortgage insurance and valuation fees are also considered borrowing expenses.
In addition if the total of the borrowing expenses are less than $100 (how likely is that?) then these charges are fully deductible in the first year.
The trip to buy the property is not deductible, rather it is considered an acquisition cost and will be used to offset capital gains liabilities.
(The ATO is now on the lookout for Redwing’s dodgy tax return[exhappy])
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958
You must be logged in to reply to this topic. If you don't have an account, you can register here.
