Take our quick quiz to see if you are susceptible to these common tax mistakes.
- You have just bought an ageing villa. As soon as you move in, you strip the rotting carpet and rewire the whole house. Can you claim for these repairs?
- You’ve bought a townhouse that was built in 2003. You’ve called around, and it looks like it’s going to cost quite a bit to hire a Quantity Surveyor to write a depreciation schedule. You decide to bite the bullet and hire one anyway. Is this a good plan?
- You are looking to buy an investment property out of town. In the process, you’ve made trips every second weekend to view properties. Can you claim all of these trips?
- You bought your investment property in June. It’s May now and you’d like to sell the house to free up capital to buy again. Your friend says you should wait until 1 July to exchange contracts. Is she right?
- Even if you are making these repairs to enable renters to live in the property, they are considered capital expense because the damage was done before the purchase. You can’t claim the repairs. You could, though, claim depreciation on the repairs – check with your tax professional.
- Yes, it’s a good plan. The money you recover in depreciation should more than offset the cost of the Quantity Surveyor.
- Yes, you can claim these as long as they have all been solely for the purpose of inspecting investment property.
- Your friend may be right. If you exchange contracts after 1 July, you can defer tax for another year. You’ll also make sure you have held the property for over 12 months, thereby reducing your Capital Gains Tax by half. Depending on your circumstances, it could be worth waiting another six weeks or so.
How did you do? Remember, Majestic recommends you consult a trusted tax professional to make sure you meet your tax responsibilities and make the most of your entitlements.