Hi All,
Whilst owning 2 IPs,I don’t consider myself a sophisticated investor. I get nagged by other half for not claiming all allowable expenses – part due to lack of knowledge, part due to losing receipts
Not too smart!Well I’ve decided to change the lack of knowledge part
Seeing as other half spends hours organising paperwork, and almost does property managers job for her in respect to one IP, my question is,how much is reasonable to pay family members for secretarial/book keeping?
I know it’s meant to be arms length transaction, but what would an appropriate rate be and how would you work it out?
Thanks in advance
You might want to come to an agreement with your relative on an hourly rate for their bookkeepping duties or you could say ‘I’ll give you $____ for doing this, that etc.’
You would work out how much is ‘right’ when both of you are happy with a price for services received and rendered.
I’ve heard you can claim 10% of the repayments per property, but that you will need an ABN as it would be classed as a business?
Cheers,
Gatsby.“Sometimes the hardest thing to do in life is often the best thing to do.”
If IP’s are in both names as joint tenants then be careful as it’s hard to prove arm’s length, at the very least he should keep track of hours spent and then only charge yo for you 50% of the time, still get ABN and put it on tax return as income – I’d seriously talk to an accountant as to whether this shoudl even happen when it’s joint.
If properties are in your name then slightly easier as he’s then doing the work for you without him having a direct interest in the property itself, but I would ahve him get an ABN and claim the income on his tax return etc.
Our accountant is happy that I do the latter but not the first. I’d run it all past an accountant first.
REgards
PKI’d also make sure you “actually” paid your partner and had paperwork to support that fact, they also claim it as income.. definetly speak to your accountant and make sure it’s done correctly..
REDWING
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Not too smart!
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