12 Topical Accounting Tips

12 Topical Accounting Tips

1. If you have bought a property you can use a quantity surveyor to inspect the premises and issue you a report allowing you to claim tax deductions for the cost of the materials that went into building the premises;
   
   
2. It is possible to buy residential and commercial property in a Self-Managed Superannuation Fund and borrow some money to help purchase the property;
   
   
3. The sale of residential premises and the rent received from residential tenants is always a GST free transaction;
   
   
4. Under certain circumstances the sale of a commercial property can be GST free if a lease is in place and a GST free sale results in less stamp duty being payable;
   
   
5. As an investor, if you sell commercial or residential property after owning it for more than 1 year you only pay Capital Gains Tax on part of the difference between purchase price and selling price;
   
   
6. It is vitally important to make sure you purchase your property in the correct entity to achieve the best possible tax result. Always seek financial advice before making a large purchase;
   
   
7. Under certain circumstances it may be possible to transfer Business Real commercial premises owned by an individual, Partnership, Company or Trust into a Self-Managed Superannuation Fund.
   
   
8. You cannot transfer a residential property owned by yourself, a Partnership, Trust or Company into a Self-Managed Superannuation Fund. You can however purchase a residential property from an unrelated seller;
   
   
9. When borrowing money to purchase an investment property the interest is tax deductible, not the whole of the principle and interest repayment;
   
   
10. Negative gearing is where the rent received as income on a property is less than the interest, rates, property management fees, repairs, insurance and other costs of running a rental property that are tax deductible. This loss can offset other taxable income to reduce the amount of tax that the owner pays to the ATO each year;
    
    
11. Margin scheme can be used in certain circumstances to reduce the amount of GST that has to be paid to the ATO when a property is sold. It is quite complicated but financial advice should be when selling any property to ensure the right GST provision is applied;
    
    
12. Interest only loans sometimes allow you to decide what loans you are going to pay your principal repayments to giving you the opportunity to pay off non tax deductible loans faster than your investment loans allowing you to maximise your tax deductible interest expenses.

Natalie Power Principal

0438 523 854  |  natalie@powerfulacc.com.au  |  www.powerfulacc.com.au

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