Hi All,
I own an Investment property which is 8 months Old worth $259k, rent return $250 Pw.
Each year I pay I'm paying 20k to 25k in Tax. My tax return after I pay the accountant fee's is about $1000. Which seems quite low to me.Does anyone have any recommendations on how to increase to Tax Return? My income is pushing 100k. This is the 2nd accountant i've had in 3 years. No one seems to want to offer advice & the ones that do just want huge commisions.
Any advice is appreciated. I don't know all the loop holes in the Australian Tax Sysyem. So i'm relying on my accountant to get the maxium refund possible. I dont think this is happening.
Any recommendations for Accountants in the Brisbane Area?
Thanks Jai
[email protected]Hi Jai,
Are you claiming depreciation on the property? If not, getting a depreciation report can increase the expenses for your rental property. Of course, this depends on how old the property is and the value of fixtures and fittings etc.
Unfortunately, a lot of the loop holes have been closed. For a wage earner, there isn't a lot that can claimed as an income tax expense. If you are claiming a deduction for motor vehicle expenses, make sure you are keeping good records so that the option that provides the best result can be used.
Are you in a position to buy another property, or you do you want to buy another property? Another negatively geared property would reduce the amount of tax you are paying.
The only way is to make sure you are claiming everything you are entitled to. No accountant is able to tell you everything so just try to get your head around it a bit and offer up suggestions for your accountant. Basically any expense that is related to money making can be claimed some how.
Did you know that you can claim travel to see your accountant, maybe to a PO box to collect the mail, to the shop to buy something for the property for example. It all adds up
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 am not an accountant so don't listen to me check the ATO web site links below .
If you claim building write off depreciation it can be a large expense on paper.
How do you get a depreciation report as advised by Dan ?
Answer – you can employ a quantity surveyor who will work out a depreciation schedule that you can then hand to your accountant.
http://www.ato.gov.au/individuals/content.asp?doc=/content/00183243.htm
If you claim building write off depreciation you reduce your cost base each year and eventually increase the capital gain if you sell later.
Did you know you can claim the borrowing costs over five years.
http://www.ato.gov.au/individuals/content.asp?doc=/content/00113245.htm
Claiming repairs
http://www.ato.gov.au/individuals/content.asp?doc=/content/00183233.htm
Down loadable guide
http://www.ato.gov.au/individuals/content.asp?doc=/content/00237831.htmhttp://www.ato.gov.au/individuals/content.asp?doc=/content/00237983.htm
Now 2.5% of building costs – as an example on a building cost of $100,000 so it is the cost of the building not the land !
that would works out to $2500 extra expenses a year.
At 40% tax that would be worth about $1000 in your return.
However your capital gain increases by $2500 a year through reducing the building cost base.Thanks for the replys! I have a depreciation report on the way. My Accountant is going to re-submit my tax return.
I am in a position to buy another IP but it seems like a huge outlay just to incease my tax return. The financial advisor recommends me to buy another one, but he wants big $$ to implement this strategie.
cheers
Do you mean your accountant didn't originally suggest getting a depreciation report done??
You shouldn't be buy property to reduce tax, but with the aim of making money. Tax should be only an incidental consideration.
What strategy is there to implement that needs paying for?
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 guess educating myself on the whole tax system is a better way of going, than just relying on my accountant to sort through the paper work.
Thanks duckster I have down loaded those documents to read.
I had a statement of advice done by a financial planner, But i find it a little diffulcult to take advice from people who arn't already successful in investing. It all looks good on paper.
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