All Topics / Help Needed! / CLAIMING SHORT TERM RENTAL AS A TAX DEDUCTION

Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of geezergeezer
    Member
    @geezer
    Join Date: 2010
    Post Count: 6
    May 3, 2011 - 10:59 am

    Hello all,

    I have a question that I am not able to find the answer to on the net??

    I have just purchased a property that I am renting for a short period of time, around 2-4 months. After which I intend to move into.

    I was wondering if there is any point in firstly obtaining a depreciation report and secondly going to the trouble of record keeping in relation to all deductions etc..

    ie: is there a minimum term for renting to obtain benefit.
    The property is negatively geared. Value of approx $450,000

    Thanks for your time.

    Cheers
    Geezer

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    May 3, 2011 - 12:27 pm

    Hi Geezer

    I’m not an accountant but I doubt there’s a minimum term.

    I don’t think a depreciation schedule would be worth the hassle if only rented for a short period.

    Just track the income/expenses on a basic excell spreadsheet.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of ALF1ALF1
    Participant
    @alf1
    Join Date: 2011
    Post Count: 237
    May 3, 2011 - 1:19 pm

    Hi Geezer.
    Jamie makes valid points but the one that really needs answering is: are you actually going to have a lease agreement (would have to be periodic) and then there are complications with this alone. You need the lease document to prove to the ATO that you were indeed renting the premises. The use of a Quantity Surveyor to depreciate your property for just 2-4 months would be price prohibitive unless you planned in the not too distant future to convert it back into an IP. Just as Jamie suggested, it would be prudent keep a spreadsheet recording of ingoings and outgoings for the time it is rented out..

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    May 3, 2011 - 10:10 pm

    Yep, steer clear of fixed leases when renting out your property for a short term. It’s hard enough getting the buggers out on a periodic lease.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of geezergeezer
    Member
    @geezer
    Join Date: 2010
    Post Count: 6
    May 4, 2011 - 7:00 am

    Hello

    Thanks to all for your information.

    I have another tax related question.
    If I have the situation where I have 2 investment properties. Are they individually assessed by the ATO in relation to income & expenses/deductions etc or are they both added together to form 1 taxation assessment etc.

    Hope that I am making sense.

    Cheers
    Geezer

    Profile photo of angelinsydneyangelinsydney
    Participant
    @angelinsydney
    Join Date: 2011
    Post Count: 270
    May 4, 2011 - 7:14 am

    Hi geezer,

    Each properties income and expenses and depreciation are itemised separately and the total NET gains/losses are added/deducted (as the case may be) to your other income (salaries, wages, royalties, etc).  The resulting outcome is your total taxable income.

    The whole thing would be too long to discuss in one thread but I hope my summary above makes sense.

    Take care,

    Angel

    Profile photo of geezergeezer
    Member
    @geezer
    Join Date: 2010
    Post Count: 6
    May 4, 2011 - 7:38 am

    Thanks for that Angel

    Makes perfect sense.

    Cheers
    Geezer

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