The ATO has enforced strict guidelines on tax deductions for rental property owner’s travel expenses.
As a rental property owner, you are not able to claim deductions for travel expenses relating to inspecting, maintaining or collecting rent. If you have already claimed a tax deduction for the cost of travel to and from your property in your 2018 return, you will need to request an amendment. The law change came into effect on 1 July 2017 and affects tax returns from 2017-18 onwards.
You may claim these travel expenses on your tax return if you are carrying on a rental property business or are an excluded entity.
An excluded entity is a:
Corporate tax entity
Superannuation plan that is not an SMSF
Public unit trust
Managed investment trust
A unit trust or a partnership, all of the members of which are entities of a type listed above
The ATO has issued a warning to the public regarding illegal early release of super schemes, which are subject to severe penalties.
There are strict rules around when you can access your super so your current decisions do not jeopardise your quality of life in retirement. The ATO has reminded the public you may only access your super early if you have experienced severe financial hardship or you have reached the preservation age and have stopped working.
How these schemes work
The promoters of these schemes:
Encourage you to transfer or rollover your super from your existing super fund to an SMSF to access your super before you are legally entitled to
Target people under financial pressure or those who do not understand super laws
Claim you can access your super and put the money towards anything you want which is not true
Charge high fees and commissions, presenting the risk of losing some or all of your super to them
May request your identification documents which can result in identity theft
Penalties apply to promoters and individuals who illegally access their super early. If you illegally obtain your super early, it is included in your assessable income even if you return the super to the fund later. If you are an SMSF trustee, you may be fined up to $420,000 and liable for jail terms of up to five years. Civil and criminal penalties apply to promoters.
Property is a valuable addition to any investment portfolio. Deciding whether a house or apartment is a worthier investment depends on many factors. Keep in mind that timing is your best friend for buying any property due to the housing market’s volatility.
Consider the information below so you can make the right move for you in the property market.
Apartments are not inferior investments to houses as they present many advantages that houses do not.
Apartments are usually more reasonable than houses as they lack land and costs like insurance, maintenance and upkeep are provided for by body corporate in a strata scheme
Apartments in inner-city areas that are accessible to tenants and provide higher rental yields, lending security to your investment.
You can build up a diversified property portfolio with greater efficiency with apartments as opposed to the more costly investment of houses
Houses also offer several advantages.
The value of land appreciates over time, making your investment worth it in the long run
Suburban houses are less costly but still have significant investment potential if the suburb is being developed or accessible by public transport
You may have complete autonomy and control of how your run your house as opposed to apartments which have to adhere to body corporate rules
Contact us for more information.