that you can claim the interest on a vacant block of land as long as you can show that you are in the process of building on that block of land for the purpose of eventually renting it out???
not many accountants know this!!
Interesting aussierogue,
How do you show that you are in the process?
Perhaps digging a hole and state that you’ve started the foundations! Sorry, a bit silly [
]
Maybe have some plans drawn up, erect a temporary fence…options?
What if you claim for a couple of years, then sell without building? There would be a time limit before “actual” contruction must commence, I suppose.
Sue []“Be careful not to step on the flowers when you’re reaching for the stars”
I am an accountant, and you would be stunned at just how little we know.
I’m dead serious.
Very interesting indeed.
I have been sitting on empty land paying interest for 18 months waiting for 3 townhouses to be built (to keep and rent out). It would cheer me no end if I could claim a deduction for the interest paid during this time.
Any idea of the section, paragraph etc in the tax master where I could direct my accountant to?Regards
Clive
Hmm – did not know that, very int.
Welcome aboard Rodders – that was a crack-up, in a twisted cynical kind of way! Sounds like you’re in the right place and I’m sure can answer heaps of questions about all the other stuff that goes with investing.
SMTM – where do you live? I know someone in SE QLD who would be able to advise you.
[
]
Mel
[email protected]Just to give a some background, I’m pretty much where Steve McKnight was at the start of his book. I’m a disgruntled Accountant/Auditor working in a Chartered firm, currently looking to change careers (but first it’s off to London, working holiday). For the record my knowledge on investment products is pretty good but that knowledge has come from outside the accounting world.
As far as accountants go, people believe that they know everything about minimising tax and investment. Yes sure their knowledge on minimising tax is OK, however I’ve always said that “Nobody knows what tax rules affect them better than the person themselves”. This doesn’t mean that accountants are useless (although some are), the right ones are invaluable and should be part of any team. However dont rely totally on their word, as accountants are not God.
As far as investing is concerned, accountants are almost useless. My recommendation, speak to other ethical successful investors themselves (ie not me). They’ve done it, whereas accountants work 60 hours a week waiting for retirement.
Who’s more believable.
Rodders
Being a business services/tax specialist I take professional offence at your comments. You cannot generalise the accounting industry this way & there are many good practices & partners within them (a lot of these are my friends) who are more competent at advising what to do with your wealth than anyone I know. Of course there are not so good advisors out there but generally accountants in public practice have sound financial sense and judgement. Can you tell me how many practices you have worked for & at what level for you to make such a rash statement about our industry.
JBThis doesn’t mean that accountants are useless (although some are), the right ones are invaluable and should be part of any team.
JB,
Could you please explain what part of the above you didn’t understand. As for the rest of it, that’s just my opinion, you’re allowed those in this country.
Now if you would excuse me, I have a profession to get out of, because it bores me sensless.
Rodders
Rodders
Perhaps your opening statement should have read:
“I am an accountant, and you would be stunned at how litte I know”
Nobody likes having their profession criticised.
I hope you find a successful career change and Merry Xmas !!!!
JBHi Rodders,
I understand where you’re coming from. Our accountant is fantastic with tax minimisation etc, but when it comes to investing, particularly in property, we have been able to teach him a few things. He doesn’t have an investment property as he’s never gotten around to doing anything about it. Not to say he’s completely useless. He’s got ideas. But he’s never put any into practice.
So, no matter what industry you are in, there are an awful lot of people out there advising/selling/servicing etc. things on which they have no real practical experience.
Cheers,
Karen[]No worries JB, good luck with the tax, I dont envy you. In fact anyone that can make it in what I find to be a utterly boring area, has my respect for persistence alone, well done.
Merry Christmas,
Rodders
Our accountant tried to tell us that Quantity Surveyor fees weren’t tax deductible. We’ve spent over $2000 on QS fees and, thanks to this forum, we were able to tell him they were definitely deductible.
I guess the secret is to shop around for one who is up-to-scratch on property investing. I’m half way through an Accounting degree so will be doing our own one day!
SMTM – where do you live? I know someone in SE QLD who would be able to advise you.
Mel
Mandurah WA.
g’day
it was an interesting piece of info i got from api magazine a few months ago and because i was building on a vacant block it stuck in my head. went to see my accountant who said it cannot be done but i asked her to look into into. im not sure of the actual rule but she came back and after some checking confirmed that it is possible. i have to wait until the next tax return to check it out. in the mntime ive been keeping all my travelling rcpts, etc etc and intend to claim the lot…
the reason it entered my conscience once again was an atricle in the most recent api magazine pg 84 where the author states that the property ‘must be rented or available for rent’ in order to claim tax – this is not technically true.
come on you accountants out there see if you can present a case to backup this claim
cheers
sue – good question. i guess the way i would prove is that the loan is an investment loan and that i have stated from the very beginning that i intend to use the house once built, as an investment property. what happens if i change my mind??? not sure……….
oh yeh – one last thing. blve the rule says that you must complete the building w/in 12 mos or can only claim 12 mos – or something to that effect..
Glad i read the post to the end..
i have heard that you can claim the interest also ‘building within 12 months’ being the criteria though [
]Great to see some accountants on the site !
as i’m sure we’d all appreciate some advice on different scenarios, and to those accountants out there !! anything that you can think of to help out.. please post.. cheers
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Glad i read the post to the end..
i have heard that you can claim the interest also ‘building within 12 months’ being the criteria though [
]Great to see some accountants on the site !
as i’m sure we’d all appreciate some advice on different scenarios, and to those accountants out there !! anything that you can think of to help out.. please post.. cheers
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Come off your high horse JB, don’t be so paranoic. No-one mentioned your name. [
]I make worse kind of statements about solicitors (and builders and brokers).
Cheers,
Pisces133
People, People, People
Let us not forget we all live (in Australia at least) in a world of taxation self assesment. We can claim what we like as a deduction, even the basset hound as a dependent AND THE ATO WILL ACCEPT THE RETURN.
Now if you were ever one of the unfortunates that were picked for an audit or check then it might be handy to have some supporting evidence as to the deductiability.
Ask yourself fellow forum posters how many of you have ever been audited?
In the meantime claim away!
As for accountants its how you instruct them and what you pay them for. I always start with the belief that every expense is fully deductible and then ask why I can’t claim it.
The tax rules are so complicated that nobody can be expected to know everything! Often the accountant has educated themselves at my expense because they have had to go away and do a little research.
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