Thursday 28 July 2016

Property Investor Newsflash! Don’t miss out on the benefits of depreciation!

Are you unaware of the benefits of depreciation on your investment property? Don’t despair. You are not alone and it is never too late to reap in on these benefits. Claiming depreciation is one of the most important steps in an investor’s journey. You can even claim retrospectively, with your investment’s depreciation able to be backdated two years. Your first port of call should be an experienced quantity surveyor. Shop around by all means, but industry leader, Washington Brown stands by its expertise by offering a great incentive to engage their company. If you do not save twice the fee of their engagement, the cost of the report will be fully refunded. And on top of this, investors who engage Cramer Property as their Property Manager will receive a discounted report fee.

It is estimated that millions of dollars will be missed over the coming years in tax depreciation claims due to changes in what can be defined as plant and equipment. Laws change frequently so it is essential that you have a report prepared by an expert in the field. If you are renovating a kitchen or bathroom in a property built after 1985 – get a quantity surveyor in before you demolish so they can assess what the residual value of the existing items are. This residual value can be claimed as an outright deduction and can generate huge savings in the first year. For instance, a rental property with a 20 year-old kitchen could possibly attract an immediate deduction of around $5,000 if removed. The added bonus is that you get to claim depreciation on the new work once it is complete too!

A dollar today is worth more than a dollar tomorrow so deduct items as quickly as possible. Individual items under $300 can be written off immediately. An important thing to remember here is that provided your portion is under $300, you can still write it off. For instance, say an electric motor to the garage door cost an apartment block $2,000. If there are 50 units in the block, your portion is $40. You can claim that $40 outright – as your portion is under $300. You can also try to buy items that depreciate faster such as purchasing a microwave that costs $295 as opposed to one that costs $320. Items between $300 and $1000 fall into the Low Pool Category and attract a higher depreciation rate. So for instance, a $1200 television attracts a 20% deduction whilst a $950 television deducts at 37.5% per annum.
Even properties built before 1985 (when the building allowance kicked in) are worth depreciating. The purchase price of your property includes the Land, Building and the Plant and Equipment. A highly qualified quantity surveyor can help you apportion or break down the purchase price into those categories. As an investor, you can go on the Washington Brown website, free of charge, to get an instant estimate of the likely tax depreciation deductions on a property before they buy it. This calculator uses real life data collated from every inspection we do on behalf of our clients. So the data gets more accurate with time.

Please note: Cramer Property do not have a commission or referral fee arrangement with this company. We just believe in passing on valuable information and adding to our service by pointing out savings to our clients where we can.

Monday 11 July 2016

Are you an Ace Ventura?

If you are a pet lover you may be interested to know where you and your pet stand in your strata scheme...

It appears that more than two-thirds of Australian households include pets and Australia has the highest incidence of pet ownership per household of any country in the world. It is also estimated that one in five people in New South Wales live in a strata scheme. Therefore it goes without saying that the pet policy issue is going to come up. 

Every strata scheme is different and therefore you must understand the rules surrounding pets prior to purchasing or renting in the building. However generally the key issues related to keeping animals in residential areas, particularly in a strata scheme, are related to cleanliness, noise, and unsociable behaviour. 

That said you do not require Owners Corporation consent to keep a guide dog or hearing dog in a strata scheme however whether you can keep your pet in the strata scheme depends on the terms of the By-laws which apply to the scheme. If the tenant/owner has told the Owners Corporation everything they need to know, and there should be no possible objection to your keeping a pet, then generally the By-Laws of a strata scheme will have the effect that the Owners Corporation must not unreasonably withhold its consent. Consent can be withheld by the Owners Corporation if you asked to keep a large dog or several animals in a small apartment. If the tenant/owner believes consent has been withheld unfairly they can take the following action; Mediation OR Adjudication OR Appeal to Consumer, Trader and Tenancy Tribunal.

If the Owners Corporation grants you permission to keep a pet you must ensure that the presence of your pet does not become a nuisance for other residents in the strata scheme. Even though you may have the consent of the landlord and the Owners Corporation, any owner or occupier within the scheme can apply for an order to remove a pet on the grounds that it is causing a nuisance. To minimise the chances of this occurring, you should ensure your pet is house trained, that a dog is kept on a leash when necessary and that all animals are taught appropriate behaviour. If your pet is a dog, excessive barking is an issue that must be addressed. If regularly walking or behavioural training of your dog does not remedy this situation, you may need to reconsider the suitability of living in a strata scheme altogether.

Please note: this information is intended as a guide and should not replace legal advice, below is a list of resources for tenants to seek further information;

● Application forms to resolve disputes and publications containing information may be obtained from the NSW Office of Fair Trading; website or the Renting and Strata Services Branch of the NSW Office of Fair Trading on 9338 7900 or 1800 451 431 (outside Sydney). ● Community Justice Centres can assist parties in reaching an agreement to resolve a dispute. The NSW Government section of the telephone book contains details of these centres. ● The NSW Department of Housing Home Purchase Advisory Service provides information on buying a strata unit – telephone 1800 806 653. ● The Tenants Union of NSW is a specialist Community Legal Centre that aims to represent the interests of all tenants in NSW. Its website is located at – telephone (02) 9251 6590 ● The Community Relations Commission For a multicultural NSW, provides translation and interpreting services – telephone 1300 651 500.