Hi, just wondering for the future. I have three IP’s now and aim to have 10+ in a few years. When does the ATO regard you as having a real estate business? If I quit my job now and just had three properties would I be seen by the ATO as having a real estate business? At that point I presume you could starting deducting car purchases used as part of your business, seminars that improve real estate knowledge etc. Asking just out of interest, the ATO website didn’t help. Thanks
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This topic was modified 8 years, 9 months ago by
Jon.
You’ll have to get specific advice from an accountant – but I doubt you’ll be seen as having a real estate ‘business’ just by buying and holding. If you develop regularly then certainly, but otherwise it’s just being an investor just like any other class.
There’s quite a few investors out there with 20+ properties which the ATO don’t determine to be businesses. ;)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
There was a case a few years ago in which someone with 12 properties was considered not to be in the business of property rentals.
Why do you want to be considered to be running it as a business?
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
Speak to your accountant but some of the deductions you are wanting to claim are probably claimable after you own one investment property.
A couple of articles that have addressed this are here;
http://blog.aussie.com.au/4-tax-deductions-you-should-be-aware-of-when-investing-in-property/
and item 11 here;
http://www.yourinvestmentpropertymag.com.au/tax-strategy/how-to-avoid-the-tax-traps-that-could-get-you-audited-by-the-ato-209653.aspxJacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks for the replies. I was reading a book by Dolf de Roos and he was saying as a real estate professional you can claim 100% of expenses against your income if you were considered as having a business rather than just your marginal tax rate. He is a New Zealander but seems to be speaking more about the US market in this book (Real Estate Insider).
Thanks for the replies. I was reading a book by Dolf de Roos and he was saying as a real estate professional you can claim 100% of expenses against your income if you were considered as having a business rather than just your marginal tax rate. He is a New Zealander but seems to be speaking more about the US market in this book (Real Estate Insider).
Hope you don’t believe this crap?
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
Classic Terry
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
He is a New Zealander but seems to be speaking more about the US market in this book (Real Estate Insider).
Its a US taxation term, not applicable in Australia…..
(though interestingly…..if you live in the USA and your investments are in Australia…..doesn’t prevent you from classifying as this :)Same with I always find it funny I can depreciate Australian property against USA taxes even though same depreciation doesn’t apply in Australia (doesn’t help with AMT etc :( but still worth calculating each year for carry forwards)
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This topic was modified 8 years, 9 months ago by
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