By David Shaw. 13/12/2016
The beginning of a New Year sees opportunities to review and take stock of your investment property portfolio so that you are ready for the next tax season.
As a property investor, what should you review before 30 June this year?
Review your PAYG Tax Variation
January and February is a great time to revisit your PAYG Withholding Tax Variation to ensure that it still accurately reflects your estimated financial position.
For example, has your salary or wage increased significantly over the past six-months? Have you worked more overtime or received more commissions than originally stated? Have your loan interest rates dropped?
If you would like a review of your 2016/2017 PAYGW Withholding Tax Variation completed in January or February 2017, contact WSC Group on 1300 365 125 or [email protected]
Most people know that when you rent out an investment property you can claim a deduction for the outgoings such as council rates, water rates and agent management fees. However, many investors forget about claiming depreciation, especially in properties which are older, as we often see new clients that have not had a depreciation schedule prepared by a quantity surveyor.
You should note that in general, building depreciation can be claimed on any building constructed after the 19th July 1985. Although building depreciation can be claimed on the original cost only, even a building constructed 20 years ago may have a reasonable amount of depreciation which can be claimed. Plant and fitting depreciation can also be claimed and when you purchase the property a quantity surveyor can assign a market value to the plant and fittings.
Repairs vs Capital Improvements
Expenditure for repairs made to an investment property may be deductible if they relate directly to general wear and tear or other damage which has occurred as a result of your renting out the property. For example, replacing some guttering as a result of storm damage is a deductible repair.
However, some repair expenditure is of a capital nature and the deduction for this is spread over a number of years. This includes improvements, renovations, extensions or alterations and even the replacement of an entire section of the property, such as the kitchen cupboards.
If you are looking to carry out some significant repairs on your investment property prior to June 2017, please contact your Tax Agent for further clarification regarding the deductibility of the planned works. Seeking clarification prior to starting any alterations to your investment property will help you achieve the best tax effective outcome for your situation.
Review your Interest Rates
Just because your current investment loan was once competitive does not mean that it still is! With so many loan options available in the market, it is important that you review these against your current loan to ensure that you are getting the right fit for you.
A WSC Group Lending Manager will be able to give you an indication as to whether or not there is something better on the market for you. Contact WSC Group on 1300 365 125 or [email protected]
for further information to take advantage of this complimentary review.
Given we are well into the Summer storm season; it is a good opportunity to review the level of insurance coverage on your investment properties. Building, contents and landlord insurances are all deductible expenses. However, you should be regularly reviewing these to ensure that you have appropriate coverage for your property’s needs.
For assistance in reviewing the tax-effectiveness of your property portfolio, contact WSC Group on 1300 365 125 or [email protected]
to book your complimentary initial meeting with one of our Property Tax Experts for a “tax health check” on your investment properties to get your 2017 off to a prosperous start!
*The advice published on social media mediums by WSC Group is of a general nature and does not constitute specific financial advice. For a detailed financial strategy you should consult with a qualified financial advisor before making any investment decision.
David Shaw is the CEO of WSC Group: Certified Practising Accountants and Business Advisors, and
was voted Property Tax Specialist of the Year in the Your Investment Property 2013 Readers Choice Awards (as well as runner up in 2012, 2014 & 2015).
Disclaimer: while due care is taken, the viewpoints expressed by contributors/sponsors do not necessarily reflect the opinions of Your Investment Property.
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