Tax Specialist/ Accountant of the Year: Shukri Barbara
Property Tax Specialists
What do you love most about your job?
I love meeting and talking with people. Understanding their particular circumstances and way of thinking helps us be creative with solutions that suit them and their objectives in life, as well as wealth creation.
What are the advantages of having a tax specialist on your team?
Having a property tax specialist on the team of advisors will help investors avoid costly mistakes throughout the journey and the transaction process, from planning phase, pre-commitment, to purchase and later sale. They are someone who is not emotionally involved to check your ideas and plans, comparing them to other clients who are in the same market and advising on the tax implications and cash flows – enabling better decisions.
What are the top five biggest tax traps investors should avoid at all costs?
Borrowing to extremes, not allowing for bad times or loss of an income with the birth of a child.
Asking for advice after a contract is signed, or calling up for advice one to two days before an auction.
Setting up structures without rationale or reason. Understand why it is to be set up and how it works.
Not understanding the implications, costs and trustee responsibilities; not having proper documentation.
Repaying loans instead of using offset facilities to reduce interest expense.
What do you think will happen to rules regarding negative gearing in the next five years and beyond?
Investors usually adapt to any changes over time. However, what government is brave enough to introduce a change which causes short-term pain to 1.9m investors? With adverse changes the risk is that valuations will be less than the loan values, threatening share prices of banks with major investments in the housing loan market, subsequently impacting on the whole economy and tax revenue. My prediction is that there will be no changes over the next five years. After that, changes have to be signalled at least 25–30 years ahead or accompanied with some other compensation.
How can an investor choose the right tax expert to work with?
Meet and talk to them. Someone with life experience better understands family situations, the stage of life they are at, ambitions for success, retirement, etc. They are someone with whom a longer-term relationship can be developed, who will continue to understand your goals.
Explaining complex issues in simple language that can be understood is of great comfort and usually comes with practice and experience. Experienced property tax specialists are dealing with people in similar situations all the time. They help clients avoid costly mistakes.
They are qualified, with membership of the appropriate professional bodies, such as CPA Australia, the Tax Institute and others, which ensures they are up to date with the latest technical changes. Membership of Property Investment Professionals of Australia is also an advantage.
What are your top five tips for investors on how to maximise their tax benefits for 2015?
What are some of the most common tax issues investors contact you for advice on?
- Prepay expenses in June, including rates, repairs and maintenance, strata levies, cleaning, etc.
- Keep a record of your travel to inspect or maintain the property or collect rent.
- Have a quantity surveyor’s report to claim depreciation on building and plant and equipment.
- Keep records to claim all expenses, especially small items.
- Minimise ‘bad’ interest by using an offset facility against the main residence loan to store any spare cash.
Apart from asking ‘what’s deductible and what’s not’, the tax issues investors seek help with most depends on what stage of life and what stage of the investment journey they are on.
Investors who are young, or are just starting the journey, are looking to understand the tax rules and set themselves up correctly with appropriate ownership structures to maximise their benefits, and minimise their tax and the cost of any mistakes. An example is: should they acquire the new property in a trust structure, or should they buy one main residence or several IPs.
Investors who are older are looking to minimise their tax liability as they plan to exit investments (minimising capital gains), or ensure they are producing positive income for retirement.
Investors between the above two are looking for support and advice to help them make the right decisions, or to test their assumptions, or to just talk about an idea as they sail through or as their circumstances change. Some examples include deciding which property in the portfolio will have minimum tax and maximum cash flow on sale; or the tax implications of subdividing and developing a site, renovating or constructing a granny flat.
If there was one tax tip every investor should remember, what would it be?
One of the mottos I learned in relation to tax was ‘The more you realise how difficult it is, the easier it gets’.
If you understand how difficult some things are, then you pay more attention to them by getting expert advice and/or learning more about them.
Because each person’s circumstances are different, there is no one tax tip that fits all people. However, it is always best to discuss investment intentions with your property tax specialist before committing to a property investment, to find out if it can be done better – for example, using an offset type loan instead of a principal and interest type, or noting that the relevant date for CGT is the contract date, not the settlement.
How does it feel to win the award?
Not only am I honoured, but I am humbled by and grateful to all those who nominated me. A sincere thank you as I continue to help you succeed and achieve your goals.
What readers said
“Shukri provided me with clear, concise advice on a duplex I am about to build on an existing property I have owned for many years. I spoke to a couple of other accountants and one seemed to have no idea and the other left me questioning his competence in general.
“I was referred to Shukri by a friend and I am glad I found him. Shukri explained all the tax implications and the tax treatment of all the expenses to me, as well as giving me an outline of the record-keeping I will need to maintain throughout the process.”
– Omar Moujalli
Go to page: 1 2 3 4 5 6 7 8 9 10