Tax Time - Negative Gearing for Dummies

Tax Time – Negative Gearing for Dummies

This week’s post is one for the beginners out there – anyone who’s just starting out or thinking about getting their hands on an investment property.

This is probably the easiest ever explanation of negative gearing. Granted, it’s not very detailed, but it’s simple to understand!

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Realising Your Property Tax Depreciation Potential

Realising Your Property Tax Depreciation Potential


If yes, you are definitely not alone. Many property investors that are new to the property market are not realising the potential tax savings that can be generated from incoming producing properties, which could potentially be tens of thousands of dollars!!

More often than not, the property investor is generally unaware that property depreciation exists or they think that it would not be worthwhile, as the property is old or in poor condition.

The good news is that the boat has not left. Whether the property is old and/or in poor condition or even renovated, it is always worthwhile obtaining a property tax depreciation schedule for your investment property.

Realising Your Property Tax Depreciation Potential

So take advantage of the potential tax savings now and put more money in your pocket by contacting us either via email [email protected] or phone 0401 673 762. We would be pleased to provide free initial advice and help you unlock and realise the property tax depreciation potential of your investment property!

Should you wish to proceed with obtaining a Property Tax Depreciation Schedule, we guarantee that we will save you twice your fee in the first full year or the report is free!

To order a Property Tax Depreciation Schedule by downloading the Application Form at

QS-ING Quantity Surveyors and Cost Engineers are specialists in property tax depreciation and our service provides an accurate and current report that complies with the ATO requirements.

What is a Property Tax Depreciation Schedule?

A Property Tax Depreciation Schedule is the name of a report that determines the amount of money that can be claimed for the wear and tear that occurs on your investment property. The ATO allows property investors to claim a deduction related to the building portion and plant and equipment items that form part of the property.

Who is really taking advantage of negative gearing

Who is really taking advantage of negative gearing?

MORE than one million Australians are now embracing negative gearing to the tune of an $8 billion annual tax break.

But according to new research by the Australia Institute think tank, its use has spread from traditional Liberal seats to “battler” suburbs held by Labor, The Australian reports.

The single biggest group of people using negative gearing live in the Labor heartland of Canberra, including 18,200 voters in the electorate held by opposition assistant Treasury spokesman Andrew Leigh.

The heaviest users, however live in government electorates held by Tony Abbott and cabinet ministers including Joe Hockey and Malcolm Turnbull.

The report highlights the political challenge now facing both parties in any attempt to wind back negative gearing and an associated tax break on capital gains.

Who is really taking advantage of negative gearing

“People in Liberal Party seats on average were likely to get the largest benefit from negative gearing,” said Australia Institute senior economist Matt Grudnoff told The Australian.

“Those in Labor seats were second and significantly further back are those in Nationals seats.”

The research was conducted using calculations by the National Centre for Social and Economic Modelling, which matched postcode data from Australian Taxation Office statistics with electorates.

According to the research, more than half of the tax breaks by dollar value go to households in the top 10 per cent of the country when ranked by income.

Grattan Institute chief executive John Daley said: “Most of the benefits in financial terms and most of the cost to the government goes to high-income earners. The idea that you keep negative gearing to look after middle Australia, given where the cost goes, is bizarre.”

Story source:

Minimise tax on your investment property

Minimise tax on your investment property

It is no secret the property market has been hot over the past year. Sydney and Melbourne are in “boom” territory and the sunshine state is also giving Brisbane investors a warm feeling.

No wonder then that many investors, upgraders and baby boomers are cashing in on their nest eggs and selling for a profit while the good times roll on. After all, it was one of the world’s most famous investors, Warren Buffett, who said: “Buy in gloom, sell in boom.” Selling now could be a beautiful reward for years of hard work and sacrifice.

However, capital gains tax (CGT) can quickly eat into that attractive figure on the contract and make your cash payout much smaller than you originally thought.

The 10 best ways to minimise your tax when it comes to selling property.

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Most investors miss out on tax rebates

Most investors miss out on tax rebates

Even small items like smoke alarms and shower curtains can be claimed on rental properties.

Four out of every five property investors are missing out on potentially thousands of dollars in tax rebates, by forgetting to claim on everyday household items.

Shower curtains, smoke alarms, lawnmowers, roller-door motors, microwaves and garbage bins are among the dozens of minor objects in the average rental home that landlords routinely forget to claim depreciation on.

New research conducted by tax depreciation specialists BMT has revealed that figuring in these assets can increase the cash flow generated by a property by around 15 per cent.

“Property investors tend to focus on the larger-ticket depreciation items available, such as the structure of the house and large plant items in the house,” said BMT managing director Brad Beer.

Most investors miss out on tax rebates

“However it’s often the smaller items which can make a significant difference to an investor’s cash flow.”

Beer, who recommends investors engage a qualified quantity surveyor to create a deprecation schedule for their property, says investors can often name a few depreciable items, such as carpet, hot water systems and light fittings. “But a range of less obvious items, such as garbage bins, exhaust fans or smoke alarms, are often overlooked,” he says.

BMT conducted their survey among their 190 staff Australia-wide, asking them which items their clients found “very surprising” when told they could be depreciated or which they’d missed out in their DIY filing of depreciable items. The company has more than 8000 regular referrers to their business, including property professionals and accountants who recommend their services to property investors.

They found the most common assets never claimed for were items like garden sheds which have, on average, a depreciable value – the purchase price of the item minus its salvage value which can then be claimed for over its useful life – of around $855 and ceiling fans ($265) right down to smaller expenses like shower curtains ($30). Frequently missed were other assets like solar-powered generating systems ($5500), automatic window shutters ($800) and intercom systems ($745).

Story source: ; Story by Sue Williams

Be prepared to walk that line

Be prepared to walk that line

With more than 100,000 property investors receiving letters from the Australian Tax Office for possible incorrect property deductions this year, it’s crucial you have a plan for effectively managing your tax situation.

Although it may seem tempting to exaggerate a claim, it isn’t worth the risk. Heavy penalties apply to those caught claiming excessive deductions or failing to declare rent.

Astute property investors can adopt a range of strategies to legitimately minimise tax liabilities, while maximising their tax breaks. And the first step should be to arm yourself with trusted experts.

While it may cost upfront, paying for expert advice and services, will pay dividends for years to come. Because, getting your system right – for effectively managing your tax situation –can help clarify and manage the following areas, which can often trip investors:

Be prepared to walk that line

Be aware of what you can claim. Sounds simple, but, are you sure you’ve got it all covered.

Research your tax obligations and claimable expenses. Remember too, that expenses are only claimable when the property has been available for rent. When performing repairs or maintenance, anything completed prior to the property being available for rent will not be tax deductible.

Is it a repair or an improvement? Not all work performed on your property is deductible. If the work involves fixing damage caused by wear and tear, it is likely to be a repair and therefore tax deductible. But when you are replacing old materials with new and enhancing your property, the work is more likely to be considered an improvement and will instead be added to the cost of your property, representing a depreciable asset.

So, if you’re ever in doubt when it comes to walking that fine line of optimising your tax position, seek professional advice early, or even contact the ATO directly for a ruling.

Can I claim my mortgage on my business tax

Can I claim my mortgage on my business tax?

Many small businesses operate from the owner’s home. This could mean the factory is a shed in the backyard and the office a corner of the kitchen or dining room table.

For others the business can have a separate section of the home or permanent structure on the property used exclusively by the business. The facts of each case will determine what costs can be claimed as a tax deduction.

Business owners are often keen to claim a percentage of the interest on a loan where a mortgage has been taken out to purchase the property. The ability to claim property related expenses will depend on two tests being passed. Read more