RCR Finance Bulletin # 10 - Friday, 13th June 2008

Year End Tips For Investment Property Owners

1. Renovations by previous owner - You may be eligible for a deduction for depreciation on the cost of improvement by a previous owner, provided items are identifiable and itemised in a depreciation schedule.
2. Immediate deductions for low cost assets - Generally you will receive a deduction for assets costing $300 or less provided that they are: used for income producing purposes other than carrying on a business; they are not part of a set of assets; or one of a number of identical items that have a combined value greater than $300.
3. Non-commercial rental arrangements - If you rent a property to family or friends at below market rent you may not claim the total rental property expenses as a deduction.
4. Substantiate your claim - Make sure that you have the receipts to prove your deduction and show why the expense was incurred to derive assessable income.
5. Acquisition and disposal costs - You cannot claim the costs of either acquiring or disposing of your property. However, you will need details of these costs.
6. Prepare a depreciation schedule - You may consider having a depreciation schedule prepared by a qualified quantity surveyor. The costs of having one prepared are tax deductible and may add a significant tax deduction for depreciation.
7. Repairs at time of purchase - Expenses for repairs to property are generally deductible provided that they relate to wear and tear or other damage as a result of earning rental income. The cost of initial repairs at the time of purchase are not deductible.
8. Prepay property expenses - You may be able to prepay property expenses up to 12 months in advance. Prepaid expenses are not automatically deductible. A review of eligible prepayments should be carried out.
9. Travel and car expenses - If you have travelled to inspect, carry out maintenance or collect rent you may be able to claim the costs of travelling as a tax deduction.

 DISCLAIMER...The information contained within this Newsletter / Bulletin is of a general nature only and is not intended to be relied upon or to be construed as the giving of professional financial, legal or economic advice. RCR Finance Pty Ltd makes no warranties or representations whatsoever regarding the quality, accuracy, or otherwise of any material contained within this Newsletter / Bulletin. RCR Finance Pty Ltd will not be held liable to readers or users of the material contained within this Newsletter / Bulletin for any loss or damage however caused resulting from the use of the material. All readers or users are advised to seek their own independent professional financial, legal or economic advice.