Expert Advice with Tyron Hyde
This summer, when you’re enjoying some time off don’t get carried away with that holiday feeling…
Chances are if you are on holidays, you are by the coast. When you’re relaxed it’s very easy to get caught up in the romance of owning your own piece of paradise. It’s in our DNA and Australians love the concept of a beach house all to themselves.
You can go any time you want! And you can rent it out when you don’t want to go- right? Well yes, but the reality is, you will spend some, if not most, of your precious holiday maintaining the house as there will inevitably be wear and tear so your holiday can quickly become all about everyone else’s holiday.
You may argue that the numbers stack up and it will be a cheap holiday place to visit. And at first glance it might. Interest payments and running costs offset by the rental income can make it look good in the halo of optimism that comes with the first flush of real estate lust.
The ‘we have got to have it and we will make it work’ compulsion is common when purchasing real estate. Before you know it, you may have spent over a million dollars on your holiday. If you do decide to jump in, Washington Brown can help you maximise your returns and save you money.
If you do decide to jump in, go in knowing there are other discounts you can claim - Quantity Surveyor and depreciation expert, Tyron Hyde, has the following advice.
“Holiday houses can be depreciated if they are rented out to a third party.” That doesn’t mean you can’t stay there when you want to though.
“As long as it’s available for rent most of the year you can block out a two week period over Christmas and claim the depreciation pro rata. You are still entitled to that deduction regardless of how many weeks the property is actually rented out. As long as it was available for the full 50 weeks,” explains Tyron.
“I’m seeing many clients buy holiday homes at close to, or less than the construction cost and if you furnish your holiday home, you’ll magnify the deductions,” he said.
Tyron Hyde is the CEO of Washington Brown and is considered one of Australia’s leading experts in property tax depreciation. He is also a registered tax agent. Washington Brown manages construction costs worth over $2 billion and completes 10,000 schedules annually. For a depreciation schedule quote CLICK HERE and follow the 3 simple steps or estimate your depreciation cost.
The Washington Brown Free Depreciation Calculator will give you an estimate of the depreciation deductions you could claim on your investment property
Read more Expert Advice articles by Tyron
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.