Finance Health Check for Investors

Have you noticed of late significant increases in the interest rates you are paying on your loans?

focus-interest-ratesIf you have, it is due to the governing body for the banks (APRA) directing them to build their cash reserves. It may be time to look at one of the non major lenders.

With increases in investment interest rates and new restrictions on interest only loans, it is becoming tougher to borrow for investment.

In today’s climate of rate rises and banks lower borrowing tolerances it is now even more important to engage the services of a professional mortgage broker and not rely on any one bank for a solution.

Competition among banks has never been greater with large variations in home loan products, interest rates and lending policies.

Some banks will not lend at all to purchase investment properties.

Releasing the equity in your current property or finding the benefits you may be entitled to with different banks could be found by exploring your options with a professional broker. They could find opportunities to help advance your portfolio or streamline your current lending you may not even be aware of.

With the lending markets constantly changing it makes sense to re-evaluate your loans from time to time.

A discussion with a professional mortgage broker who could assist you with all important loan structuring, product selection and interest rates may enhance the performance of your property investment.

If you would like a free no obligation appointment to discuss your circumstances please don’t hesitate to call Tim Hansen from Your Property Finance (YPF Group) on 0413 305 900.

**Written by Tim Hansen, Senior Finance Broker for YPF Group**

Depreciation Schedules on Investment Properties

DID YOU KNOW… Only around 20% of Investors have a tax depreciation schedule done on their investment property, which means the remaining 80% are missing out on substantial ATO Tax Depreciation benefits.

Some frequently asked questions about Depreciation Schedules…

  1. So how does a depreciation schedule help me?

Simple. A depreciation schedule will help you pay less tax. The amount the depreciation schedule says you claim effectively reduces your taxable income.

  1. Is my property too old to claim depreciation?

The simple answer is NO. If your residential property was built after July 1985 you will be able to claim both Building Allowance and Plant and Equipment. If construction on your property commenced prior to this date, you can only claim depreciation on Plant and Equipment. But it will still be worthwhile.

  1. Shouldn’t my accountant prepare this report?

If your residential property was built after 1985 your accountant is not allowed to estimate the construction costs. Tax Ruling 97/25 issue by the Australian Taxation Office (ATO) has identified that only a fully qualified quantity surveyor brings the appropriate education, experience and training to provide reliable figures upon which to base a property tax depreciation schedule.

  1. Will you need to inspect my property?

The Australian Institute of Quantity Surveyors (AIQS) Code of Practice stipulates that site inspections are necessary to satisfy ATO requirements.  A trained Quantity Surveyor will ensure all depreciable items are noted and photographed. This guarantees you won’t miss out on any deductions. The documentation can then be used as evidence in the event of an audit.

  1. My property is renovated. Can I still claim?

Yes. You will need to report how much you spent on renovations. This is an ATO obligation. If the previous owner completed the renovations you are STILL entitled to claim depreciation. In either case, where the cost of renovation is unknown, a Quantity Surveyor has been identified by the ATO as appropriately qualified to make that estimation.

  1. How much will my depreciation schedule cost?

John Willats from Homesure charges a one-off fee of $550 (GST inclusive) which is fully deductible and reports display 10 years of claim.

  1. I bought my property 3 years ago. Can I still make a claim?

Yes you can. Your accountant can amend your previous tax returns up to two years back. There are some exceptions, so contact your tax agent or the ATO for clarification.

**Information supplied by Realestate.com.au

 

Welcome to our blog!

Ever wished you could have your own personal Real Estate agent that would be available to help explain the buying and selling process? Well now you can!

This blog has been set up so we can help with all the difficult questions that you may have regarding everything in Real Estate. Our Pam Court Realty team literally want to share our knowledge and experience with you, so if you have any questions we would love to hear from you.

Thank you for reading!