All Topics / General Property / Quantity Surveyor fees NOT TAX DEDUCTIBLE

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  • Profile photo of Shirley_2Shirley_2
    Member
    @shirley_2
    Join Date: 2003
    Post Count: 87

    Our accountant has just advised that QS fees are not tax deductible. Were others aware of this? We’ve paid $400 per property on 6 properties so hope the benefits provided by the QS reports outweigh this.

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Hi Shirley

    Did he state why they were not tax deductible? We have claimed all reports that we have done in the past.

    Cheers
    Mel

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    http://www.ato.gov.au/individuals/content.asp?doc=/content/31258.htm&page=1#P19_325

    The above link states:

    What you can claim
    You can claim a deduction for certain expenses you incur for the period your property is rented or is available for rent. However, you cannot claim expenses of a capital or private nature – although you may be able to claim decline in value deductions or capital works deductions for certain capital expenditure or include certain capital costs in the cost base of the property for capital gains tax purposes.

    You may be able to claim a deduction for the following rental expenses:

    advertising for tenants
    bank charges
    body corporate fees
    borrowing expenses
    cleaning
    council rates
    electricity and gas
    gardening and lawn mowing
    in-house audio/video service charges
    insurance – building, contents, public liability
    interest on loans
    land tax
    legal expenses
    lease costs – preparation, registration, stamp duty
    pest control
    property agent’s fees and commission
    quantity surveyor’s fees
    repairs and maintenance
    secretarial and bookkeeping fees
    security patrol fees,
    servicing costs – for example, servicing a water heater,
    stationery and postage
    telephone calls and rental
    tax-related expenses
    travel and car expenses – rent collection, inspection of property, maintenance of property, and
    water charges.

    I think we have found another professional who isn’t up to date.

    Cheers,

    Simon Macks
    Mortgage Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Thanks Simon, you’re a champion.[:)]

    BTW, did you notice my softly, softly approach this time?[;)] I was not as certain on this one.

    Cheers
    Mel

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    We make a good team Mel!

    Simon Macks
    Mortgage Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of Shirley_2Shirley_2
    Member
    @shirley_2
    Join Date: 2003
    Post Count: 87

    Dear Mel and Simon – many thanks for your advice. It just shows we shouldn’t take “so-called” experts’ advice at face value, although we should be able to do so.

    We will be visiting our accountant again armed with the correct information!

    Perhaps you can also help with another query. We recently travelled to another town over a weekend to purchase a duplex, inspected it only to find another agent had sold it that day. I’d kept faxes received from the real estate agent prior to visiting and accommodation[:)] receipts. Our accountant said we are unable to claim any travel/accommodation costs as the trip didn’t result in a purchase. Would you agree it’s not tax deductible?

    Like others, I’m addicted to this forum. It’s so good to read of others who understand what we are trying to do and that everyone is so helpful!

    Shirley

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    Mel,

    I am not so sure of this one. I think the ruling depends upon whether you are in an actual business of buying properties – anyone advise at what point this occurs?

    Maybe Mel will know!

    Cheers,

    Simon Macks
    Mortgage Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Simon, I’m with you on this one.

    My understanding is that unless you are in business, any trip to purchase is not deductible, unless you already owned some in that area, and also had a look at them while you were there.

    As to when you are ‘in business’ of property owning, would be up to an accountant to help here. I think the argument can be made at any point, but what is acceptable to the ATO probably would require a good argument. In short, I don’t know on this one.

    Cheers
    Mel

    Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225

    Hi Shirley,

    I believe that speculative costs are not tax deductible.

    Costs directly associated to investment after transfer of ownership are. Else we all could claim holidays on the whim of finding an investment without proving effort.

    I was about to suggest the obvious .. check with your accountant .. but perhaps a change might be as good as a holiday by sounds.

    Mel .. looking forward to meeting you this Saturday, if your time permits.

    Kind regards, Phil

    Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225

    Hi all,

    My accountant informs me that all of the ‘searching for houses and associated expenses stuff’ cannot be claimed as a deduction. It is however – according to him – a cost that can be set against a capital gain when I sell a property down the track.
    He tells me that as my primary income is from my Ambulance employ (the forty hour a week kind of stuff!!!) that trying to con the tax office into allowing all sorts of travel as an allowable deduction in my property investing business might be a little hard to push.!!!![:D]
    That’s my two cents worth – so keep all of your receipts and stuff – we do!!
    Cheers
    Lisa R[:)]

    Profile photo of zenzen
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    @zen007
    Join Date: 2016
    Post Count: 46

    Hi Team PI’s, wondering if I was to attend a property development & renovation workshop valued at $2k, is this tax deductible?

    I’m an investor looking at purchasing houses in the future to renovate and be a developer in 3 years.

    Cheers

    zen

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Zen – no.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Shirley… time you got yourself a new accountant I think !

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of zenzen
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    @zen007
    Join Date: 2016
    Post Count: 46

    Thanks Terryw, appreciate.

    Another question for my Team PI’s – if I was to travel for 5days interstate or to NZ and purpose is to buy a property, is this tax deductible? eg, plane, hire car, hotel, food.

    zen.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Zen again the answer is no. These expenses do not relate to the production of current income

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of zenzen
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    @zen007
    Join Date: 2016
    Post Count: 46

    Thanks Terryw. I guess having a business in buying real estate these costs maybe deductible.

    zen

    Profile photo of BennyBenny
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    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi Zen,

    I guess having a business in buying real estate these costs maybe deductible.

    Yes, OR if you already owned property in New Zealand or interstate, then necessary trips CAN be deductible too. i.e. You ARE already receiving income from there, and a trip needs to be made to ensure the income continues (e.g. inspections re maintenance issues).

    But if you haven’t yet bought, no. Similar are deductions for education – if you already ARE a property investor, then paying for further education CAN be deductible (and that can include books, seminars, etc). But if not already an investor, guess what?? ;)

    With those trips – if you happen to turn a “trip to inspect an IP” into a five-day holiday, then do get your accountant’s advice before you go claiming it…. the ATO doesn’t like funding your personal time off !!

    Benny

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi Zen

    If you were in the business of property – which would be rare – then you could claim these costs.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of zenzen
    Participant
    @zen007
    Join Date: 2016
    Post Count: 46

    Thanks Benny – thanks for confirming the scenarios!!!! Awsome!!! Yes will see accountant re: to distinguish percentage property purchase/inspection vs holiday (seminars, apprenticeships in property, etc).

    Thanks Terryw. Looks like one must treat their investments like a business in order to get the applicable/allowable deductions.

    Many thanks my Team PI’s :)

    zen

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