Investment Properties

If you are thinking of purchasing an investment property, you need to consider the following:

• Whose name should the property be in?
• How will the income/(loss) from the rental property affect any government benefits/payments, tax rebates & levies?
• What type of loan should you get, & whose name should it be in?
• What date should you purchase an investment property?
• Do you need to obtain a Quantity Surveyor’s report for depreciation & special building write off?
• Was your rental property once your main residence? If so, what are the Capital Gains Tax consequences if you sell?
• If your property is negatively geared, can you reduce your weekly PAYG tax now rather than waiting for the end of the financial year?
• What can I claim? Can I claim agent fees, borrowing costs, council rates, insurance, interest, low cost assets, water, yard & pool maintenance?
• Are you charging a non-commercial rate of rental to family or friends?
• Are you dividing the income and expenses according to your ownership?
• Can you claimed expenses prior to renting out the property?
• Do you have any prepaid expenses?
• Do you understand the difference between a deductible repair and a non-deductible capital expense?
• Are you claiming for the costs of inspecting your property?

Red Diamond Accounting can help you understand the importance of each of these important questions.