RENTAL RETURN

Viewing 6 posts - 1 through 6 (of 6 total)

savanahmp2401
Member
@savanahmp2401
Join Date: 2011
Post Count: 8
October 12, 2011 - 3:27 am
Hi,
im thinking of getting my house rented out and just need help with calculating tax deductions/claims for a rental property. after adding up all the deductable and other rental outgoing expenses, at what percentage of the total do you calculate how much you can claim back? is it the tax bracket im on ie 30%?
would appreciate anyone's help on this thanks.
kellyh
Member
@kellyh
Join Date: 2011
Post Count: 2
October 12, 2011 - 3:34 am
Hi
There are a couple of things you should do:
1. Go to the ATO website – there is a downloadable PDF book about what you can claim
2. Allow yourself to be conservative with 48 weeks per year rental
3. Budget for any maintenance items that you know need attention
4. Are you using a property manager – their fees are deductable
5. Look at your weekly rental x 48 = total gross – outgoings (inc your rates and insurance in these figure) = total weekly net
6. If your mortgage is higher than your rent then you can negative gear and do a tax adjustment now, you don't have to wait until the end of the year. Then you will get a tax break with your regular tax you a paying instead of having to wiat until the end of the year. It is called PAYG variation.
7. If your rental return % is 5% or above, you are doing well.
Hope this helps?
savanahmp2401
Member
@savanahmp2401
Join Date: 2011
Post Count: 8
October 12, 2011 - 4:13 am
thnks kindly.
bjsaust
Participant
@bjsaust
Join Date: 2009
Post Count: 141
October 12, 2011 - 4:20 am
Don't forget a depreciation schedule.
Derek
Member
@derek
Join Date: 2004
Post Count: 3,544
October 12, 2011 - 4:26 am
Hi Savannah,
Really need to know what your taxable income is before doing such an exercise. Your taxable income determines how much your deductions will be.
Simple rule.
Your gross taxable income + gross rental income = updated gross taxable income.
Eg Earn $120K income + $30K rental income = $150K
From updated gross taxable income deduct all allowable deductions = final taxable income.
Eg $150K – $50K rental expenses = $100K final taxable income.
Then compare tax you should have paid on your gross income exclude rental income with your tax payable for your final taxable income to see what you save in tax.
Tax payable on $120K = $32,349
Tax payable on $100K = $24,955
Tax saved = $7394
You will need to consult income tax scales for exact figures. These are available on ATO website.
savanahmp2401
Member
@savanahmp2401
Join Date: 2011
Post Count: 8
October 12, 2011 - 5:09 am
thank you..it makes it a lot clearer.