Property Investor Newsletter April – May 2012

ATO land­lord tips that you may not have known!

We do appre­ci­ate that the focus of every land­lord is to optim­ise their tax returns and max­im­ise their income. How­ever, be aware of when you can claim repairs and work on the prop­erty as a legit­im­ate tax deduction.

CAN YOU CLAIM THE COST OF REPAIRS BEFORE YOU RENT THE PROPERTY OUT?

You can­not claim the cost of repair­ing defects, dam­age or
deteri­or­a­tion that exis­ted when you obtained the prop­erty, even if you car­ried
out these repairs to make the prop­erty suit­able for rent­ing. This is because
these expenses relate to the period before the prop­erty became an income-producing
property.

Example: Mr House needed
to do some repairs to a rental prop­erty he recently pur­chased before the first
ten­ants moved in. He paid trades­people to repaint dirty walls, replace broken
light fit­tings and repair doors on two bed­rooms. He also had to have the house
treated for dam­age by white ants.

Because Stephen incurred these expenses to make the prop­erty suit­able for rental, not
while he was using the prop­erty to gen­er­ate rental income, the expenses cap­ital expenses. This means he can­not claim a deduc­tion for them.

 IN THIS ISSUE

IN THIS ISSUE

WHAT RECORDS DO YOU NEED TO KEEP?

You need to keep proper records in order to make a claim, even
if you use a tax agent to pre­pare your tax return or you do it your­self. You
must keep records of the rental income you receive and the deduct­ible expenses
you pay.

You must keep these records for five years from the date your
tax return is lodged.

Did you also know that you must keep your own­er­ship of the
prop­erty and all the costs of purchasing/acquiring it and selling/disposing of
it records for five years as well – from the date you sell/dispose of your
rental property?

As cap­ital gains tax may apply if you sell your rental prop­erty,
we recom­mend you keep records of every trans­ac­tion over the period of own­er­ship
of the prop­erty. This would include con­tracts of pur­chase and sale, and
con­vey­ance and loan documentation.

Keep­ing these records will help you work out your cap­ital gain
or loss cor­rectly and ensure you do not pay more tax than you need to.

Beware — White ants

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About 

Jhai is an award win­ning Inter­net Mar­ket­ing Real Estate Agent for Eld­ers Toongab­bie and Kings Langley. After run­ning his own inter­net mar­ket­ing busi­ness he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to mar­ket them­selves online. Jhai is now fixed on one goal. To teach real estate agents that they can mar­ket online so much bet­ter than they cur­rently are.

Since then he has been con­sist­ently quoted in the Sydney Morn­ing Her­ald and Real Estate Busi­ness online. He is a reg­u­lar guest blog­ger on TheHomePage.com.au, shar­ing his expert­ise of mar­ket­ing aspects for the Real Estate Industry. His biggest pas­sions are his wife, mar­tial arts, dogs and most of all property.

seven hills real estate agent NSW
Cnr Federal Road Prospect Highway Seven Hills NSW 2147 Australia