Hi,
I have recently changed agents due to the one I was using being useless, the tenants I have are a bit whingy, but it is kind of understandable after deal with the idiot PM we had. (4 months on and the agent has not replaced the oven which does not work properly, which I have instructed them a few times to do – and they conveniently don't get my emails each time, though one was verbally and he doesn't remember that).
We have discussed a week free rent to smooth things over with the tenant, however, I want to know if this would have an implications, from taxation, insurance or otherwise this could cause.
Also would a gift voucher (then used as a tax deduction – is this possible) for the same amount be a better way to do it, essentially it would be a personal tax preference to most tax savvy people, however I want to know if one ay would be better than the other and if one way should be avoided.
Cheers,
John
If you live anywhere near the property (or feel like posting it) go the gift card option – make it clear to the tenant that it is coming from you (not the PM). As for tax implications – call it gifts/rent rebate (in kind) etc.
A rent rebate is always hard to administer and the agent still gets the full commission even if it rent free!!
We have done an immediate change on PMs, so we have had to pay out the old one for 90 days, the new one is not charging us for 90 days so there is not commission atm anyway.
My concern is if an insurance company would frown upon this and if the ATO would as well, but if there is no issue I will jsut let the tenant decide which they would prefer.
There shouldn't be an issue with the insurer.
As for how you do it, pretty much up to you: you receive full week's rent & purchase gift voucher (you have both income & offsetting expense, no tax payable), rent rebate (no income, no expense, no tax payable)
Just do it as a rent rebate and you should be fine. Let your tenants know that for the all inconvenience they will get a rent rebate.
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