This may be a silly question, but….
While working out what the costs would be for us to own an IP, I have roughly worked out all the tax deductions etc. However, am I correct in thinking that we will still have to cover all the real costs, ie full interest, all rates, levies, agent costs etc, until we get our tax refund at the end of the tax year? So although we will get a tidy sum than, our cashflow throughout the year will not benefit at all?
Of course on the flipside, we'll have incoming rent which won't be touched until tax time, so it probably is a silly question!
G'day Robramjet,
You can offset the costs by applying to the ATO to vary your income tax withheld from your salary/wages (if you are an employee of course) at every pay day. This is done by submitting an Income Tax Variation Form to the ATO (available from the ATO website) which should include an amount for depreciation on your IP. I have a depreciation schedule done by a quantity surveyor for each of my IPs when settled so I can apply the correct yearly figure to the ITVF. There are some quantity surveyors on this forum who I am sure can give you the advice you need.
Obviously this is just my opinion and you should consult your accountant for the details.Cheers,
Pud
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