taxation Archives - Page 2

Urgent Need To Do Away With Stamp Duty

The government-in-coming will do well to abolish stamp duty, says the Real Estate Institute of Australia (REIA). Stamp duty, levied as a traditional property tax, is not only inefficient but also decreases productivity of the nation.
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Is There A Way Past Stamp Duty? Not Likely.

New South Wales Australia Stamp Duty

Unless you have benefitted from a matrimonial home via the Family Law Act or gained through a gift in Will, you will be at the receiving end of the Stamp Duty storm. Property taxes are pretty high for Australia when compared to other developed countries, suggests Anthony Keane for the website news.com.au
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5 Tips for the new financial year for property investors

filing tax returnsWe have seen ourselves through another financial year; the same mad rush for tax returns, the meetings with our Quantity Surveyor, our efforts to fetch the depreciation schedule from our property managers and matching it with the QS’s schedule. In short, we go through furious activity this time each year and all for a single purpose- procuring maximum deductions on our property. Knowing the importance of tax deductions let me offer you 5 tips that every property investor will hopefully be well served with this new financial year.
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Nine quick tax tips for property investors

1173741_housesTo be on the right side of law and the taxation system, you need to be diligent about planning and paying your taxes. Ken Raiss for the Property Update gives a few tax tips for the property investors.
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Superannuation reforms geared towards more property investment

1166602_cash_rules_everything_around_meThe Federal budget did not read out any changes in Negative Gearing or Capital Gains tax, did not announce cuts for the housing sectors, proposed to help the baby boomers downsize and largely left Superannuation untouched. Phil Thomson for The Canberra Times says that the Federal budget has proposed (only proposed) a lot on the Superannuation reforms front; however anything may only be implemented once the legislation become full-fledged laws.
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Federal budget does not announce any changes in Negative Gearing

real estateThe coalition is not looking to make any changes to Negative Gearing declared Alex Hawke, a Liberal Backbencher, while being questioned on the coalition’s earlier promise of scrapping it altogether. An article on Realestate.com clarified that the government claims any circulated newspaper reports to be completely baseless. The Federal Treasury dittoed the statement.
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What the Federal budget means for the property market

1224071_money_The Federal Budget 2013 has been released and despite a few helpful hints, there may not be much to cheer about for the property market.
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Australian landlords claim $38.6 billion as tax deductions

1084343_new_yearAustralia’s army of 1.76 million landlords has made a cumulative claim for $38.6 billion in tax deductions for the tax year ending 2011. Larry Schlesinger for the Property Observer writes that the amount translates into a ballpark figure of $23,000 per landlord.

Comparing facts:

  • For the tax year ending 2010, the figure was $32.8 billion. This implies a leap of 18%.
  • Instead of $23000 per landlord this year, the figure was $19000 last tax year.
  • Among the deductions claimed this annual, the largest kitty belonged to “deductions for interest paid on home loans”.

Australian landlords can make a deductions claim if they procure a property for creating assessable income for themselves.

An important pre-consideration: Landlords can claim deductions for the expenses on maintenance and repair-work of a property but not on the costs incurred on renovation or home staging.

Landlords can also seek further rental deductions for expenses which include, but are not limited to, legal costs, consultant’s fee, advertisement costs, realtor’s fee, property manager’s fee. You can read the full article here.

ATO data-matching tool set to track tax evasion very closely

taxWith ATO’s data-matching tool set to report any tax-omissions, taxpayers will come under constant scrutiny, reports Larry Schlesinger. In his article for the Property Observer, he suggests how there will be a complete tab on the residential and commercial property sales from here on and nearly 10.4 million taxpayers will have to toe the ATO line (unfailingly).

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SMSF can help save tax payments on capital gains

fundsSelf-Managed Super Funds (SMSFs) are making headlines and for all the right reasons too. Kate Farelly in one of her more recent articles suggests how property investments in SMSFs are increasing by the day. Investors are wary of managed-funds are not willing to put their money in share market either despite its steadiness (old memories are playing on their minds).

Investment in SMSF can save on 15% of tax that is otherwise incurred on capital gains and rental income. If you can hold your property till the superannuation phase, you are exempted from paying any tax at all. Of course, there are disclaimers- 1) none of your friends or family should live in the family. 2) You cannot perform Home Staging on the property with borrowed funds.

If you are in your youth and looking to improve on your asset base, SMSFs may not be your best bet, argues Farelly. After all, the working legislation in this country does not permit refinancing and subsequent equity building for the task of purchasing new property.