As the end of the financial year draws closer, many investors will be turning their thoughts to how they can make the most of their tax returns.
But while everybody wants to maximise their deductions, it’s important to know what can and can’t be claimed.
Craig Hogg, national sales manager for quantity surveying firm Washington Brown has given some simple tips to make putting together your return easier.
Repairs or capital improvements?
“A lot of people get mixed up between repairs and capital improvements and the two need to be claimed in different ways,” Hogg said.
“Any work that is considered to be improving capital needs to be depreciated over time, while repairs can be claimed all at once.”
Hogg says a good way to look at the difference is to imagine a leaky roof.
“If you have a leak and you patch up the tiles that are causing it, that’s repairs and can be claimed at once, if you go out and replace the roof then that’s capital works.”
Know when any work has happened.
“Initial repairs are different again, that’s work that happens while a house isn’t being rented or available for rent and they can't be claimed,” Hogg said.
“When you’re looking at replacing an asset, something like blinds or an oven, be careful about how much you pay,” Hogg said.
“Items under $300 can be written off straight away, but anything over $300 and under $1000 has to go into low pooling, so if you’re looking at a microwave and one is $299 and the other is $301 remember the cheaper one is a 100% write-off straight away.”
Do the simple things right.
“Keep good records, it sounds simple but it’s amazing how many people don’t,” Hogg said.
“People will do $50,000 worth of work on their house and not keep a single receipt, which makes things extremely difficult at tax time.
"The other thing I'd reccomend is if you've got a second-hand property and you wan't to find out your construction costs, get an actual quantity surveyor to come to your property don't rely on something on the internet where you just punch in the details of your house."
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