Tag Archives | Brisbane Property Manager Safety Tips

Save Tax $$$ By Learning the Difference Between Fence Improvements vs. Maintenance…

fenceQ: Can I claim a deduction for the new fence I just installed on my rental property?

A: The answer is dependent on whether the new fence constitutes a repair or an improvement.

Furthermore, if it meets the definition of a repair, was it in that condition at the time of purchase?

What determines something as a repair rather than an improvement is a question of fact, determined by case law. However, in general terms, the following rules can be applied to assist you in your decision-making.

Work carried out is more likely to be a repair if:
• It relates directly to wear and tear.

• It is a replacement or renewal of a worn out or broken part.

• It restores something to its former condition and remains functionally the same.


Work carried out that has the following characteristics may be classified as an improvement if:
• It changes the character or functionality of the item.

• It becomes a restoration of substantially the whole building in its entirety.
An immediate deduction is available for work considered a repair, regardless of cost. However, an improvement or a repair to a condition that existed prior to purchase date is considered capital in nature and therefore not deductible. In some cases, a capital allowances deduction may be available in line with Division 40 of the Income Tax Assessment Act 1997 over the life of the asset.

Applying these facts, if the fence in question is a result of work required to repair damage or wear and tear that has occurred since the property has been rented out, then a deduction will be granted in full.

However, no outright deduction would be available if the new fence is:
• Of a different material to the old one (and therefore resulting in a change in character and functionality).

• An addition to the existing fence line.

• A repair to a fence that was already damaged at sale date.


You may be entitled to a deduction under the capital allowances provisions of Division 40 over a number of years.

Finally, remember this information is general and does not take into account your circumstances. You should speak with an adviser to consider if it’s suitable for you.


Source : Australian Property Investor (April 2012)


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Renovating? Did You Know There’s an App for That?

renovatingWith apps for almost everything, renovating has never been easier. Here are 10 of the best:

Sun Seeker: 3D Augmented Reality Viewer ($5.49)

As the cooler months roll on, it’s apparent that maximising sunlight can make or break the sale of your home. So if you’re planning to renovate for sale, it might be wise to plan your design in a way that maximises natural light. Now that smartphones have a compass function, apps such as Sun Seeker are able to overlay the camera with additional information, including the solar path of the sun. Since Dawson created the app, it has been downloaded almost 85,000 times.

MagicPlan (Free)

Using the camera function, MagicPlan measures and draws your floor plan. Simply stand in the centre of a room, point your camera at all four corners and you’re done.

Home Design 3D ($8.49)

Home Design 3D is a level up from MagicPlan. Relative to other apps, it may seem a little expensive but, in essence, it’s a slimmed-down version of PC software used by professional designers, which costs $43. You start by drawing up the rooms of your house before adding various items of furniture. You then hit the 3D button and you can fly through the property and view it from every angle. This allows you to work out what you like and, more importantly, what you might change. Give the free trial version a whirl and see what you think.

The Builder App (Free)

You’ve drawn your concept, now it’s time to bring in the professionals. Specific to Australia, the Builder App puts renovators in contact with both tradies and suppliers. The coolest feature of this app is the ”get quotes” function, which sends out a message to all the relevant tradies and suppliers within 25 kilometres, who then contact you with a quote.

Handy Man DIY ($1.99)

If you’re a bit of a renegade and want to save money by doing the smaller jobs yourself, here’s the app for you. Handy Man DIY provides step-by-step videos and instructions for simple renovation tasks. It also has features for storing information about your rooms and costs.

iHandy Carpenter ($1.99)

This is a virtual tool kit for ”hands-on” renovators. It comprises the five most common tools used by carpenters – a plumb bob, surface level, bubble level bar, steel protractor and steel ruler. Try before you buy – you can get the iHandy Level app free.

Houzz Interior Design Ideas (Free)

This app is a great way to become inspired about both interior and exterior design. It features more than 500,000 photos of properties that you can browse by style, room and location. It may be time to retire your scissors because this app, in effect, does away with the tradition of creating scrapbooks from home magazines.

Dream Home ($0.99)

Similar to Houzz, Dream Home is all about having a stickybeak at other people’s designer homes and pinching ideas. It’s the interactive element that differentiates this one – users submit their own interiors, others rate them, and those that rate well go in the ”popular” section. A good way to tap into the design trends of tech-savvy home owners.

ColorChange ($2.99)

So you’ve finished your house and you’re left with the all-important decision of what colour to paint it. ColorChange allows you to take a picture of a wall and apply different colours to see what you like. The ”magic” function cleverly excludes things such as doors and windows.

Dulux MyColour (Free)

Find yourself in someone else’s house and want to copy the colour of their walls? Or did you glimpse the perfect shade of ethereal orange in the sky as the sun set at the end of an emotionally significant day and realise, ”Hey, maybe I should paint my room that colour?” With Dulux MyColour, you simply snap a picture of something, tap the photo where you think the winning colour is, and the app will tell you the name of the paint that most closely matches that colour. The app is free, the Dulux paint isn’t.


Source : www.domain.com.au (10 July 2012)

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Danger Alert, 16 Fatal Mistakes that Can Trigger a Tax Audit …

auditAre you filing your tax return? Read on for 16 serious mistakes to avoid if you don’t want to trigger an ATO audit.

1.     Estimating rather than getting the actual figures.
2.     Claiming a deduction for interest on the private portion of the loan. The interest expense must be apportioned between the ‘deductible’ and the ‘private’ portion of the total borrowings.
3.     When depreciating assets, new assets acquired for less than $1,000 during the year are allocated as ‘low cost assets’ to the pool but the decline in value for these assets in the first year is at a rate of 18.75%, or half the pool rate. Halving the rate recognises that assets may be allocated to the pool throughout the income year and eliminates the need to make separate calculations for each asset based on the date it was allocated to the pool. For subsequent years they are depreciated at the normal pool rate of 37.5%.
4.     Claiming initial repairs or capital improvements as immediate deductions. Initial repairs to rectify damage, defects or deterioration that existed at the time of purchasing a property is generally capital and not deductible, even if you carried out these repairs to make the property suitable for renting. However, it may be claimed as capital works deductions over 40 years.
5.     Not showing dividends from dividend reinvestment plans in your tax return.
6.     Claiming a deduction for the cost of travel when the main purpose of the trip is to have a holiday and the inspection of the property is incidental to that.
7.     Not having receipts to justify the deductions you are claiming, and you cannot justify the connection between the expense and deriving the income (eg, it was for a private purpose).
8.     Omitting overseas income – taxpayers are subject to tax on their world-wide income and the ATO has agreements with over 42 countries with data-sharing.
9.     Claiming deductions for a rental property that is not genuinely available for rent, ie, a holiday house.
10.  Incorrectly claiming deductions for a property that is only available for rent for part of a year.
11.  Incorrectly claiming deductions for a rental property when it has been used by relatives or friends free of charge for the part of the year. A deduction is not allowable for the periods involving that free occupancy.
12.  Incorrectly claiming for the cost of land in a claim for capital works. Only the original cost of construction is included in the calculation and the cost of the land forms part of the cost base when calculating a capital gain or loss.
13.  Incorrectly claiming deductions on depreciating assets that are only eligible for a capital works deduction.
14.  Incorrectly claiming a deduction for conveyancing costs when they should form part of the cost for capital gains tax purposes.
15.  Incorrectly claiming all deductible borrowing expenses greater than $100 in the first year they are incurred instead of spreading over five years or over the term of the loan, whichever is less.
16.  Not splitting the income and expenses in line with their legal interest in a property where purchased by a husband and wife as co-owners.


Source : Your Investment Property (12 July 2012)


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What’s My Current Interest Rate? Wouldn’t Have a Clue…

interest rateAlmost one third of Australians with mortgages have no idea what interest rate they pay, according to a survey released this week by mortgage broker Aussie.

This figure is further compounded with almost the same percentage of property investors unaware of their interest rates, even as they seek to secure their financial future through property.

What’s more, almost a quarter of those who did know were paying more than they need to.

The question put to respondents was: How precisely do you know the interest rate you are paying on your mortgage? Please enter your current interest rate and type.

A surprising 32.8 per cent of homeowners and 29.5 per cent of investors were unable to even guess at their interest rate.

“This statistic is really worrying,” says Aussie Founder and Chairman John Symond.

“Even if the RBA doesn’t move interest rates, people need to be constantly questioning their rate.

“It could be just by speaking to their broker about a simple mortgage health check to see how much they could save,” Mr Symond suggested.

Of those surveyed who were able to nominate their interest rate within a quarter percentage band, an astounding 23.5 per cent of homeowners and 23.2 per cent of property investors were paying more than 7.0 per cent, which was the band that included the interest rates of the big four banks (7.01-7.09 per cent) in April, when the survey was done.

Now it is closer to an average 6.5 per cent interest when the official RBA cash rate is 3.5 per cent.  Variable loans of around 6.0 per cent or even less are not uncommon.

“Those who have had less than half a per cent rate cut on their variable rate since November or pay more than 6.5 per cent are simply out of market”, Mr Symond said.

“When you consider the savings between 7.0 per cent and 6.0 per cent on a home loan of $300,000 is around $197 per month and take that over the life of your loan, that is about six years and eight months cut from the loan term and several thousand dollars saved in repayments.

“I urge all borrowers to be more attentive to their home loan rate”, he concluded.

The survey was conducted online on 10-15 April 2012 to 1,000 Australians aged 18-64.


Source : Quartile Property Network (12 July 2012)

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Cords Can Kill – Do Your Window Furnishings Meet Legal Compliance?

cordsLandlords who supply corded window furnishings in rental properties must now comply with Mandatory Product Standards designed to reduce the risk of strangulation of infants and young children.

The legislation is part of The Australian Consumer Law which came into effect on 1 January 2011 and incorporates The Trade Practices Act.

Any corded window covering such as Vertical Blinds, Venetian Blinds, Holland Blinds, Roman Blinds and Curtains and any fitting containing cords, such as Curtain Rods and Tracks must comply.

If your window coverings have cords they must have:

  • A Warning Label on each cord
  • A Child Safety Device, and
  • Installation and Child Safety Instructions

Failure to comply may expose you to severe penalties and may also be a breach of your duty of care to provide safe products in the home, which also exposes you to the risk of litigation which your insurance may not cover.

If you think that your window furnishings do not comply, then contact Your Property Manager who can arrange for a specialist compliance inspection and retrofit of window coverings to make the home safe and put your mind at ease.


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