REAL ESTATE ROUNDUP

MAKE THE MOST OF TAX TIME

With the right advice investors can save thousands of dollars in tax by making claims against their rental property, says Steven Bayly.

The Go Loans managing director says investors should claim all deductions and depreciation which applied to their rental property before June 30.

He says landlords can claim up to 12 per cent on depreciable assets and often 2.5 per cent of the building cost (not the value) of residential properties built on or after July 18, 1985.

Depreciation can be claimed on the cost of improvements made after February 26, 1992 to older properties.

Mr Bayly says a residential property with a construction cost of $300,000 would allow a landlord with a depreciation schedule to claim a tax deduction of $7500 every year.

Depreciable items could be added to this allowing landlords to reduce their taxable income by thousands of dollars.

Landlords should consider their income/tax position and, where it is to their advantage, pre-pay interest on their investment loan. This should be reviewed towards the end of the financial year. Investors should seek advice from their tax consultant.

Mr Bayly advises landlords to commission a depreciation schedule from a quantity surveyor or registered builder. This up-to-date tax-deductible report shows depreciable assets such as carpets, blinds, curtains, air-conditioning, ventilation systems, fire alarm systems, light fittings and hot water units.

Other expenses landlords can claim include: land tax, telephone, insurance, council rates, bank charges, pest control, gardening and lawn mowing, repairs and maintenance, borrowing expenses, property agent fees or commissions, travel undertaken to inspect the property or to collect the rent, advertising for tenants, water charges, body corporate fees and stationery.

He also says sale of a property should be put off, where possible, until after June 30 to avoid triggering a capital-gains tax liability this financial year.

INVESTMENT PACKAGE

The world of property investment is now accessible to those with limited time and market knowledge, thanks to a building investment package offered by mortgage broker/manager Go Loans.

The package has been designed by Go Loans director Jackie Bayly and is offered through the brokers associated company Properties 4 U. It evolved from constant requests from clients who wanted to enter the property market but were unsure where to start.

Jackie, who has been involved in more than 30 property developments in Australia and New Zealand in the past decade, says she has been inundated with requests since she began offering Go Loans clients the packages a year ago.

We are finding it hard to keep up with demand and we now have clients on a waiting list, she says.

Clients were constantly asking us how to invest in property, but fewer than 70 per cent went ahead. So we identified a clear need for a property investment package which would take care of clients from the start of the project right through to the end.

Jackie manages everything from finding the best land and builder; arranging finance; organising meetings with solicitors, agents and accountants; appointing a property manager; arranging valuation and depreciation reports; and even finding people to rent the property once completed. I make sure the project is kept on budget and time, she says.

With close to 30 years in the banking industry, 17 of them as a mortgage broker, and having bought, sold, renovated and built numerous properties over the past 10 years, Jackie knows a thing or two about real estate.

She can advise clients on everything from the best locations on which to build, to how to get as many tax deductions as possible on their property investment and how best to structure their loan. Best of all, Jackie says Go Loans clients are ahead from the start because in most cases valuations on the building project are completed upfront before clients sign anything. Properties 4 U Pty Ltd aims to have equity in the property from day one, therefore reducing clients concern about how they can fund their next investment property, Jackie says.

A small fee for her services is included in the Go Loans package, which allows clients to benefit from her property industry experience and avoid costly mistakes. A major advantage of a Go Loans property investment package is that it removes the emotion from what should be a purely investment decision. Too often people get caught out by making decisions about what they would like rather than what the market demands, Jackie says. We use our expertise to build the right house in the right area where we know there will be demand. Our goal is to build for profit and expand our clients wealth portfolio.

For more information contact Jackie Bayly: Phone 8363 8800; Email: jbayly@goloans.com.au

TAXING TIMES

Using a property manager, good book-keeping and engaging a knowledgeable accountant will ensure taxpayers who own rental properties don’t fall foul of the Australian Tax Office, says Steven Bayly, Go Loans managing director.

The ATO has warned it is on the lookout this year for those among Australia’s 1.5 million taxpayers who own rental properties and claim rental losses. It  plans to examine 6000 at-risk cases and contact tax agents whose clients have unusual patterns of rental expense claims.

Mr Bayly says the ATO is looking for incorrect interest, excessive deductions for capital works, non-deductible initial repairs and borrowing costs claimed as fully deductible in the year they were claimed

MAKING INVESTORS HAPPY

Well over a third of Australia’s investors are happy with their current investments, the latest CoreData Investor Sentiment Index shows.

Go Loans managing director Steven Bayly says 38 per cent of investors are in this category, while the index showed the stronger their investment experience and knowledge and the older the respondent, the happier they were with their investments.

This research is good news for clients who have taken out an investment package with Jackie, who has a wealth of industry experience and knowledge, Mr Bayly says.

SA READY TO BOOM

SOUTH Australia is likely to be the only state where economic growth will accelerate this year.

Go Loans managing director Steven Bayly says the ANZ Bank’s June quarter report shows SA, which has joined the mining boom states of WA, the NT and Queensland, is enjoying an investment boom which will spur on incomes, house prices and economic activity.

Mr Bayly says the report says SA’s major economic indicator - Gross State Product - will rise 3.25 per cent in 2007-08 and 2008-09, up from 0.8 per cent in 2006-07

THE RIGHT PRICE

The average loan size in Australia rose from $233,500 to $236,900, the latest statistics from Mortgage & Finance Association of Australia show.

SA the average loan was $194,900. Other states were: NSW, $259,100; Vic, $224,700; Qld $239,600; SA, $194,900; WA, $244,500; Tas, $165,200; NT, $217,800; ACT $241,900.

Go Loans managing director Steven Bayly says affordability is just another reason why investors find South Australia’s property attractive.