hi guys/girls,
just a quick question. my partner & i have not experienced tax time with our IP and were wondering if the following scenario is correct:
if our yearly deductable amount is approx. $15,000 which includes loan interest, maintenance, rates etc.. & both being in the 30% tax bracket, then will our yearly tax return be approx $4,500 combined (being that we are in the 30% tax bracket).
normally i would know this but for some reason i have blanked out? [blink] if someone could shed some light on this for us, many thanks! [biggrin]
nathan
Hi Nathan,
just a note in advance…for all your taxation queries, it’s best to speak with a certified accountant – preferably your own because he/she knows your status.
Kind Regards,
George.“If You never never ask, you’ll never never know”
Have you added in rental income? That will bring down any expected return. Tax isn’t a straightforward dollar for dollar issue. You never get full value for what you pay.
income for the year is 8500, on top of yearly 37500 salary.
i am feeling silly as when we initially bought the place i worked out a different possible amount & worked it into the equation for yearly return. bummer! anyway, i think it is time to see an accountant.
does anyone know of a very good accountant in the wollongong area who knows alot about Proerty Investments? [blush2]
Nathan,
Brian Rees in Wollongong is a great accountant and knows heaps about property. He’s also a very nice guy.
kay henry
How about your depreciation Nathan, have you factored that in ??
The etc.. could be a lot…Derek has just sent me a itemised list.The devils in the detail as they say, hard to guesstimate..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Don’t forget depreciation as an outgoing when you’re doing your calculations, Nathan. I agree also that when you start to get investment properties it’s time to look for an accountant who understands property.
thanks Kay for the contact. will follow up. no depreciation for me as the IP is 28 years old (1976) and just misses out according to the ATO.Bummer.
not too worried about the lower tax return if it does work out that way, we were just hoping to put a little bit extra on the loan to build up equity faster (as we borrowed 100%). here’s hoping the tax man to be friendly to us: lol [lmao]
thanks again everyone for your help [suave2]
Hi Nathan:
>>>no depreciation for me as the IP is 28 years old (1976) and just misses out according to the ATO.Bummer.>>>Yes, you don’t get any depreciation on the building cost. However, you can get contents depreciaton, like curtains, carpets, lightfitting, stove… You’ll be surprice how much contents depreciation you can get even with an old house. Some QS company quarantees a certain amount in their report. QS report is a must for IP doesn’t matter how old the property is
Hi Nathan,
As you are now in a ‘business’ it is essential you have good book keeping habits in place so that you can legally minimise your tax.
Initially you will need to have a good grasp on a list of deductible items so these can be entered into your records as the items are paid out. I also keep a separate list of possible deductions when I am not sure (this list is very short nowadays).
You may also find it useful to search the ATO website to check your rough calculations.
As zeffix has indicated a QS may still be a worthwhile investment. While you don’t have any capital depreciation claims left (apart from any completed renovations) there are sure to be claims plant and equipment claims available to you.
Derek
[email protected]Read my comments? Think I can help you? PM or email welcome.
Nathan
Agree with Derek and Zeffix, like i said, depreciation is still to be considered, go to your accountant armed with as much info as you can, i’m still learning as i go along and always will be..[biggrin]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
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