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What are you trying to do?
Be a developer (business) or an investor?If you are in business you need to have an ABN. If your turnover is over $75,000 then you need to register for GST. As you are selling a house that is more than $75,000 this is why you need to register for GST. You can be a sole trader, partnership or a company. If you are purchasing land and then putting a house on it (with a builder doing it) you also have to take into account the Land Margin Tax Scheme. Upon completion of the property you sell it and then work out the GST.
If you are an investor you don't need to have an ABN and upon completion of the property you keep it and rent it out.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auI have found it cheaper to have a building insurance policy with one company and then the landlord insurance policy with another. I think EBM have one of the best landlord insurance policies around and are quite reasonable with their prices. I have done claims with them and haven't had issues.
Perhaps also look at the excess on the policy. If you have a low excess for the landlord insurance policy it may be the same for the building insurance policy. If you change the excess for the building insurance it may be cheaper.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auWhere is the development located?
Are you intending on keeping or selling the properties upon completion?
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auI haven't used e-tax so not sure about filling it in but will see if I can help. Where are you putting your Rental Income and Rental Expenses?
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auHaven't used them. Did a google search and they seem to be part of another company called Ascentiv Group. Also, did an ASIC search on their name. The business name has been registered since 14 Jan 2008.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auI like the "shoebox" . My clients give me the shoebox, I process it, explain the reports to them and then pass it onto the tax agent.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auIt seems strange that you would be paying for a tenant's phone use, electricity and gas when you moved out of the property. If you are paying for these they would be deductible. If you are renting out the property then the rent and therefore any deductions should go at 21 Rent on the tax return, not at 24 Other Income. Don't forget that you may also be claim for depreciation. A quantity surveyor will be able to let you know if this is possible.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auThanks for sharing the information Dan. Very interesting.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auIf you get the information from the builder then I think the amount would be "builder costs" and not the cost that you would have to pay, i.e. retail should you need to replace anything. The best approach is to get a depreciation report from a qualified quantity surveyor. This way it's done right.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auI would suggest getting a depreciation schedule done and then doing an amended tax return for last year. Then do this year's tax return and if you are a normal employee look at putting in the ATO's Income Tax Withholding Variation Application for 2011-2012 so that you receive the money back during the year to help you fund the investment property.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auThe ATO has put out some information regarding this. Have a look at this article: Has Your Rental Property been damaged or destroyed by a natural disaster?
http://www.ato.gov.au/content/00275211.htm
This should let some light on the subject for you.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auDon't forget to tell your accountant about your NZ investment properties as you will may need to include them in your Australian tax return.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auThe legal costs are considered a capital item so these are not expenses. The borrowing costs are expensed over 5 years or the length of the loan whichever is the shortest. They are pro-rata each year. You will need to know the settlement date of the property and then the date when the property was available for rent. You will only be able to claim the borrowing costs from when the propery was available for rent. The other thing you may want to consider is obtaining a depreciation report. And don't forget to advise the council that it is now an investment property as some councils have different rates for PPOR and investment properties.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auIf you are only buying in your name then using it for the costs for future IPs won't be a problem as the interest is deductible under your name. (It's when you buy in more than one name it can be a problem). The only thing I would want to know is how much interest for each investment property as I like to know what each investment property holding costs/profit is. If you can keep good records and know how much the costs are on each investment property and can calculate the interest for each one then won't be a problem.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auIf you have purchased the investment properties in your own individual name (not sure about trusts, partnership, companies) then you may be able to re-allocate the depreciation which may give you more depreciation but there are rules that apply to this. <moderator: delete advertising>
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auIf you have a property manager and they receive the rent by 30th June but don't put it in your bank account until 1st July (just to use an example date) then you must include the rent received by the 30th June in the 2010-2011 tax return. This is because the agent is acting on your behalf so it is when they receive it, not when you receive it.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auThe ATO produce a booklet Deductions for Prepaid Interest. Link attached.
http://www.ato.gov.au/content/00270253.htm
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auHave you purchased the investment properties in one name or more than one name?
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auI have designed my own spreadsheets that I use for my investment property bookkeeping business because I couldn't find any software that did what I wanted. That is, work out my holding costs before tax, after tax, how much did the property cost me to buy, work out borrowing costs, re-allocate depreciation. The spreadsheets calulate the holding costs for the total property, for each owner, and for my whole portfolio. I have designed the spreadsheet so that they match the ATO's Rental Property Schedule – all the tax agent does it inputs the figures. Too easy!
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auI don't think MYOB or Quickbooks are good for property investing as they are more designed for businesses. Accountright Plus includes the payroll which you said that you didn't need. I'm not sure if Quicken will do what you want.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.au
