To 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
The 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.
Federal budget does not announce any changes in Negative Gearing
The 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.
What the Federal budget means for the property market
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.
Australian landlords claim $38.6 billion as tax deductions
Australia’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
With 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).
