Invest
New property tax tool gaining traction
With cash flow vital early in the ownership of a property, split depreciation reports have grown in popularity, enabling easier tax write-offs.
New property tax tool gaining traction
With cash flow vital early in the ownership of a property, split depreciation reports have grown in popularity, enabling easier tax write-offs.
While tax depreciation schedules have been a staple of a property investing for years, split reporting between co-owners has been enjoying new-found fame, according to quantity surveyors BMT.
“Split reporting generates more deductions because rather than just come up with a depreciation figure and splitting it in two, it actually splits the value of the asset first and then apply the tax rules,” BMT chief executive Bradley Beer told Nest Egg.
“It means lower value items get to be claimed quicker, which means more cash flow early for the investor in their property which is when it is most vital,” he added.
Where one owner is currently able to claim immediately on assets valued at $300 or below, split owners can do so for assets of up to $600, before writing off their stake in the asset.
The same rule applies to low-value pooling, enabling co-owners with a 50-50 split to include assets of less than $2,000 (instead of $1,000 for single owners) to their pool. Low-pool assets can then be claimed at an 18.75 per cent rate in the first year and 37.5 per cent afterwards.
The result is that split reporting is becoming less obscure due to growing investor awareness, although some inertia still exists.
“The number of split reports is increasing, but sometimes it is the accountant that doesn’t understand it or doesn’t necessarily want to do it, but their job is to help you get the maximum deduction [out of] the things you’re doing and help you do your tax and claim everything correctly,” Mr Beer said.
“They should work with you on it because it means slightly better deductions for people in the early years when it’s hardest because of costs and low rents.”
Given the burgeoning Australian property market, co-ownership could be an attractive option to get a foot on the property investment ladder, Mr Beer said.
“For people who don’t have the equity, doing it together with the right partner means you still have the ability to make money.”
Property
Australia’s top 20 suburbs for property investment revealed
NSW has the most investment opportunities, according to ME Bank, but a Brisbane suburb has taken out the top spot. ...Read more
Property
CBA forecasts 10% house price drop for 2023
The Commonwealth Bank is the most negative of the majors on property prices. ...Read more
Property
Buying an apartment? Ask this first
If you’re looking to buy an apartment, there are a few things you need to consider. ...Read more
Property
What to look for in a rentvesting apartment
Rentvesting demands potential property investors think more strategically about their purchases. ...Read more
Property
FHBs should weigh the pros and cons before buying an apartment
If you’re considering an apartment as your first property purchase, you probably aren’t the only one. ...Read more
Property
Why first home buyers might want to consider an apartment over a house
Cost and location can play in favour of first home buyers when it comes to apartments. ...Read more
Property
1 in 2 Aussies can’t afford an interest rate rise
Aussies are increasingly unlikely to meet their loan commitments if rates lift, new research has shown. ...Read more
Property
Ageing homes account for one-fifth of Australia’s emissions
Almost eight million Australian homes remain energy-inefficient, leading to calls for a large-scale redevelopment program. ...Read more
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
APRA’s mortgage crackdown, the power of DeFi and last-minute tax tips
Listen now
Property
Australia’s top 20 suburbs for property investment revealed
NSW has the most investment opportunities, according to ME Bank, but a Brisbane suburb has taken out the top spot. ...Read more
Property
CBA forecasts 10% house price drop for 2023
The Commonwealth Bank is the most negative of the majors on property prices. ...Read more
Property
Buying an apartment? Ask this first
If you’re looking to buy an apartment, there are a few things you need to consider. ...Read more
Property
What to look for in a rentvesting apartment
Rentvesting demands potential property investors think more strategically about their purchases. ...Read more
Property
FHBs should weigh the pros and cons before buying an apartment
If you’re considering an apartment as your first property purchase, you probably aren’t the only one. ...Read more
Property
Why first home buyers might want to consider an apartment over a house
Cost and location can play in favour of first home buyers when it comes to apartments. ...Read more
Property
1 in 2 Aussies can’t afford an interest rate rise
Aussies are increasingly unlikely to meet their loan commitments if rates lift, new research has shown. ...Read more
Property
Ageing homes account for one-fifth of Australia’s emissions
Almost eight million Australian homes remain energy-inefficient, leading to calls for a large-scale redevelopment program. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
