FAQ Property Tax

If you have an investment property loan, it is sometimes important to ensure an optimal loan structure to maximize the tax benefit. For example, the interest expense you paid on the investment loan is fully deductible, and sometimes it is important to consider whether pre-paid interest expenses are also deductible.

An offset account is a saving account that does not require a tax file number; the amount you put in there will help you lower your interest expense. Hence, with a lower interest expense component as part of the monthly repayment, your principal reduction will be increased. In essence, the offset account does not give you interest income.

In most cases, the answer is no; the tax law provides an automatic exemption for any capital gain when a taxpayer sells their principal main residence. However, if you are a non-tax resident at the time of disposal of the property, then you might not be able to enjoy the main residence exemption.

If you are selling your house, then it is a capital asset. You will be liable for the capital gains tax at the time of disposal. The capital gains tax is the tax you need to pay between the difference between the disposal price and the acquired price plus all the incidental costs associated with the purchase and sale, including stamp duty, agent commission, marketing expense, and advertisement cost. In addition, all the interest you incurred if you have to borrow to sell that house.
Our professional CPA accountants in Inner West Sydney Ashfield and Belrose will ensure that we will help you lower the capital gains tax by maximizing all the possible incidental costs. We will apply the correct accounting and tax treatment to the capital gain tax, including small business active assets, 50% reduction of 12 months.

You can not claim travel expenses for residential dwellings; however, you can still claim the travel expense for commercial property. However, it would be best if you had a proper travel diary for this. If your property is half residential and half commercial, you can prorate the claim.

The depreciation in the investment property is made up of building depreciation and plant and equipment depreciation; it is also commonly known as non-fixture or fixture deprecation. At the moment, for a newly built investment property, you can claim deprecation for both the fixture and non-fixture items; however, for a second-hand dwelling, you only can claim depreciation on the non-fixture items. Typically depreciation is done by a licensed Quantitative Surveyor. Therefore, the fee you paid to a professional Quantitative Surveyor would be deductible.