The following information will be of assistance to you. If you purchase a property as an investment and rent out the property, you can claim certain items against your total income.
Depreciation, expenses and interest paid on borrowings have the effect of reducing your total taxable income. If depreciation, expenses and interest total, for example, $35,000 then you would save 35,000 x say, 38cents = $12,250 in tax savings. By completing an Income Tax Witholding Variation form you will reduce your tax payable each payday and eliminate the need to wait until year's end to make a claim against tax already paid. This facility is a great help to your all important monthly cash flow and makes ownership of an investment property that much easier.
Individual Income Tax Rates 2009– 2010
|
Taxable income |
Tax on this income |
|
$0 – $35,000 |
29c for each $1 |
|
$35,001 – $80,000 |
$10,150 plus 30c for each $1 over $35,000 |
|
$80,001 – $180,000 |
$23,650 plus 38c for each $1 over $80,000 |
|
$180,001 and over |
$61,650 plus 45c for each $1 over $180,000 |
Property Stamp Duty – Victoria
| Property Value |
Duty Payable |
|
Up to $25,000 |
1.4% of value |
|
$25,001 - $130,000 |
$350 plus 2.4% of the dutiable value in excess of $25,000 |
|
$130,001 - $440,000 |
$2,870 plus 5% of the dutiable value in excess of $130,000 |
|
$440, 001 - $550,000 |
$18,370 plus 6% of the dutiable value in excess of $440,000 |
| $550,001 - $960,000 |
$28,070 plus 6% of the dutiable value in excess of $550,000 |
| More than $960,000 |
$5.5% of the dutiable value |
**Remember, that if you purchase an “off the plan” apartment, townhouse or house, or “house and land” where construction has not commenced you only pay Victorian Government Stamp Duty on the land cost. Stamp Duty rates for other states available on request.
ATO Worksheet :
The following completed worksheet is an example of how to calculate your net rental income or loss. From "ATO Rental Property Guide" (page 22).
|
Income |
Established Property |
New Property |
Your Example |
|
Rental income |
8,500 |
15,600 |
|
|
Other rental related income |
800 |
|
|
|
Gross Rent |
9,300 |
15,600 |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
Advertising for tenants |
48 |
300 |
|
|
Body corporate fees |
500 |
1,200 |
|
|
Borrowing expenses |
260 |
442 |
|
|
Cleaning |
100 |
|
|
|
Council rates |
700 |
900 |
|
|
Deductions for decline in value |
597 |
8,500 |
|
|
Gardening/lawns* |
350 |
|
|
|
Insurance* |
495 |
800 |
|
|
Interest on loan(s) |
11,475 |
23,562 |
|
|
Land tax |
200 |
|
|
|
Legal expenses |
150 |
780 |
|
|
Pest control |
50 |
|
|
|
Property agent fees |
800 |
1,092 |
|
|
Repairs/maintenance |
1,000 |
|
|
|
Capital works deductions |
2,745 |
|
|
|
Stationery, postage |
80 |
50 |
|
|
Travel expenses |
436 |
80 |
|
|
Water charges |
350 |
150 |
|
|
Sundry rental expenses |
95 |
100 |
|
|
Total Expenses |
20,431 |
36,756 |
|
|
Net Rental Loss |
11,131 |
22,356 |
|
|
|
|
|
| * Cannot claim if these included in Body Corporate fees.
Net Rental Loss reduces your gross taxable income by this amount.
|
|
