Property Investments – 2018 Tax Planning
End of Year Tax Planning
This article contains commentary on many of the items you may encounter as part of your end of financial year deliberations.
Property Investments
Deductions
- Interest On Investment Loans – taxpayers who have borrowed money for a non-business investment (e.g. rental property) can check with their lenders to see if they can prepay interest prior to 30th June 2018.
- Building Allowance – the construction costs of income producing buildings may be written off at 2.5% or 4%, depending on the date of construction. Please contact us if you require additional details.
- General expenses can include real estate agents fees; building allowance (can be written off at 2.5% or 4% depending on date of construction); depreciation of fixtures, fittings, plant and equipment; share of depreciation of common property in a strata titled property; repairs and maintenance; pest control; interest on monies borrowed for investment in the property; bank charges on the property bank account; cleaning; electricity; rates; land tax; insurance.
- Negative Gearing – the net loss, which may include interest, borrowing costs, etc., may be deductible.
Income Issues
- Income Splitting – income splitting can be highly tax effective, especially if investments have been placed in the name of a lower income earner. This can be applicable where a spouse is not working and the income in the spouse’s hands would therefore be taxed at a lower rate.
- All income from a rental property should be declared.
This article does not include any of the items contained in the Australian government’s Budget for 2018/19 as the Budget has not yet been approved by Parliament.
Please do not hesitate to contact us if you would like to discuss any items with us.
An Important Message
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.