We’ll it seems we have stepped back in time. Victorians in Metro Melbourne will be in stage 3 lockdown effective from midnight tonight (8th July). As we have been through this before, our office is fully prepared to work from home and will still be available to assist our clients from home. We reassure you that your property is still in safe hands and that despite a shift in the way we do business, we will still be able to operate under these restrictions.
We wish you all the very best as we navigate through these challenging times once again. If you have any questions or concerns, please feel free to contact us on 9808 0988.
There are some things that COVID-19 can’t stop and tax time is one of them.
Everyone will have now received their End of Financial Year statement from us and be ready to do their tax returns. This will hopefully help relieve some financial stress for so many who need the extra money right now. As things started to settle into some normality, we saw an increase in inquiries, applications, and properties leased, with a total number of properties leased in June back to normal having leased a healthy 12 properties. We also welcomed 11 new landlords to our office. Just this week we approved four new groups of tenants into new properties.
There has been speculation that the COVID-19 Omnibus Act which regulates legislation around Property Management during COVID, may be extended to the end of the year to coincide with the new Residential Tenancies Act legislation changes set to be introduced on 1st January 2021. This is not surprising and given that we have had a spike in cases in Victoria in the last week and are now facing a second lockdown we would anticipate that this is imminent.
Our team will continue to keep updated with any changes during this pandemic time and we will share our learnings with you as they come.
If you would like to have a meeting with your Property Manager in our office, it is important that you book an appointment first. When you book an appointment, you are guaranteed that they will be here and are available to assist you.
As a landlord, there are many ways you can minimize your annual tax bill, and the right advice can help turn a negative cash flow into a positive one. Here are some of our tips to help you this financial year.
If your property is on a strata title, you can claim the cost of the body corporate fees.
You can claim repairs as an immediate deduction if they relate directly to wear and tear. Which is to say, if you replace a few broken roof tiles after a storm or repair an appliance, you can claim the costs of hiring a professional to make these repairs as an immediate deduction. But if you replace an appliance, you will need to claim this cost as a depreciation deduction, over the course of the asset’s lifespan.
Similarly, if you replace an old fence or install new carpets purely in a bid to increase the value of the property, then you will need to claim these costs as a capital works deduction, at 2.5% a year for 40 years.
Fees or commission paid to agents who collect rent, find tenants and maintain your rental are tax-deductible.
If you make a capital gain on the sale of your investment property, you need to pay tax on this profit.
If you bought and sold your property within 12 months, your net capital gain is simply added to your taxable income, which, in turn, increases the amount of income tax you pay.
However, if you held onto the property for more than a year before selling it, you’re eligible for a capital gains discount of 50%, which means you only need to incorporate half of the capital gain into your personal tax return.
You can claim interest charged for loans as a tax deduction when the accounts in question are used for investment purposes. This could include interest accrued through a mortgage on an investment property, money borrowed to buy shares, or other loans relating to investment portfolios.
For example, let’s say you have a $500,000 mortgage for a rental property, where interest is charged at 5% per annum and paid monthly over a 30 year period. Over a 12-month period, you would pay around $15,542 in interest for this loan. And that’s also a $15,542 tax deduction to offset the cost of your investment property.
Sometimes, the numbers can be confusing. At this point, you may hire an accountant. You can claim the costs of advice, preparation of tax returns and expense incurred for management of your rental accounts in the same year the costs were incurred.
Be aware, that you cannot claim a deduction against your rental property for the cost of preparing your personal tax return
This information is of a general nature only and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances before acting.