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2024: The Golden Year of Tax Planning

Don’t forget to download the free Fact Sheet for a summary of what is covered in this episode!

In today’s bonus episode, Ben is joined by esteemed guest expert Julia Hartman (founder of BAN TACS and Chief Technical Tax Advisor at Empower Wealth), and together they discuss tax planning strategies and why 2024 is the absolute golden year for tax planning!

Get actionable tips around superannuation contributions, learn the importance of maintaining accurate depreciation schedules, and maximize your legal entitlements when it comes to your investment properties.

It’s more important than ever to get your strategy right before 30th June, and if you’re looking for an investment-savvy tax accountant that can help, fill out the form here: https://www.thepropertycouch.com.au/tax

Let’s make this financial year the most empowering one yet!

 

Timestamps

  • 0:00 – 2024: The Golden Year of Tax Planning
  • 04:43 – Tax planning for rental properties
  • 11:12 – “Improvements” vs “repairs”
  • 22:30 – Useful tip around “first owner” vs “second owner”
  • 28:58 – All about depreciation schedules
  • 31:47 – Tax tips for FY2024 individual returns
  • 38:12 – Why you should delay your bonus?!
  • 39:02 – What’s different about superannuation this tax year…
  • 46:49 – Take note if you have HECS/HELP debt!
  • 50:58 – Still haven’t lodged your FY2023 tax return? Here’s what you need to do.

 

Free Stuff Mentioned

 

Previous “Talking Property Tax” Episodes

  • The Top 5 Tax Rules Every Property Investor Must Understand
  • Tax Planning Tips to Maximise Your Returns (Part I)
  • Tax Planning Tips to Maximise Your Returns (Part II)
  • Your Ultimate Guide to Reducing Tax on Vehicles, Private Insurance & Land
  • Navigating Tax Changes in 2023: Updates to Remote Work Claims, Renting and Victoria’s New Tax Grab
  • Maximise Your Returns: Mastering End-of-Year Tax Planning, HECS Hacks, Super Strategies, and More

 

2024 Golden Year Tax

 

 

463 | Property Managers: Are They Worth It?! – Q&A Day

 

With today’s property and economic conditions in mind, we’re back with a Q&A Day that’s focused on how to maximise your savings. 

Tune in to hear:  

Are property managers really worth it?!  

We’re giving you the unfiltered pros and cons of managing tenants, insurance, taxes and more (Basically we’re unpacking exactly what goes on behind the scenes!)  

If you renovate your Principal Place of Residence (PPOR) can it be considered tax-deductible when you turn it into an investment property?!   

Why is it important to separate household and business incomes? Plus, the newest features coming out on Moorr and managing finances at the start of a new relationship, and… 

How accurate is the narrative around property owners today?! 

Another massive episode that picked our brains (and the brains of our friends at BMT Tax Experts 😉) tune in now to discover our answers! 

 

Questions We Answer…

Q1) Saving $$ through getting rid of the property manager from Sean 

Firstly, thank you Bryce and Ben for your advice and your podcast.

Based on that we bought our first investment property just over a year ago which was great. But obviously it went from being very positively geared to rapidly. going to negatively geared very much so.

I know recently you’ve said to hold property at all costs and also mention taking on a second job etcetera.

Would you consider removing the property manager as part of this is as this would save us $50 a week and potentially bring it around to. being cash flow neutral?

Bear in mind that we live a literal stones throw away from our investment property and I have some friends who are electricians etc.

I’m just interested on your thoughts and whether that would be. considered almost like taking on a second job.

Thanks.

 

Q2) Investment Deductions when moving to PPR from Edward 

Hi, we currently live in a property.

We are looking at getting an investment property and maybe moving out of our current primary residency and turning that into an investment property.

We are doing some works on it at the moment and new floors new kitchen, maybe new bathrooms.

Is there a way to get them as a investment deduction when they transfer to an investment property?

How can I leverage that?

 

Q3) Moorr – money management with business AND partner

Hey guys, thank you for the books.

Make money simple again. Completely went through it and it makes complete sense. I just got a question for you, I’m in Moorr and I’m doing all my expenses, income and all that kind of stuff.

The income that I derive is from my business, so I use my individual taxes returns – average the two trust distributions, and that’s what I’ve done for my income.

However, with the debts, I’ve got a few debts in the business.

I was just wondering whether or not I need to put that that credit card debt in the Moorr portal and then how to separate the expenses because obviously I’ve got business expenses and what not and what to add and what not to add a little query.

The other question was my partner and I do our banking separately we derive our income separately but then we put a joint budget to cover you know groceries, car expenses and any expenses as a joint expense.

I’m just trying to figure out whether to just do a separate portion from there and just kind of figure it out that way or just really get her involved and bring her on to the Moorr portal and really nut down and try to do it together.

Any advice would be amazing. Thank you.

 

Q4) Property Investors as Small Business Owners 

Hi Bryce (and Ben),

I have been loving the winter series and listening with interest to the some of the conversations (your show and others) that all landlords are “rich heartless bastards (excuse the language) who are just taking advantage of the rental crisis” and wanted to add our own recent experience to try and provide some balance.

We have a property in the NE of Adelaide that has come up for a lease renewal and we were presented with two options/recommendations from our property manager to consider.

Option 1

In line with what has been unprecedented rental increases (well at least in the 20 years I have been investing) in the area, apply what they called a “modest” increase of $30 per week to the current rent.

Option 2

Not renew with this tenant and place the property on the market, with no changes to the property other than an outgoing clean, at current market rental rates which would see us attain somewhere between $130-$150pw increase.

Now to put into perspective Option 1, a $30 pw increase, would be the biggest increase we have ever applied to this property in the 18 years we have owned it.

Historically we have only ever applied increases of $5-$15 pw even when reletting to the market (and across the Covid we applied $0 for no other reason than it felt the right thing to do) so to apply a $30 increase would have been huge, let alone attain $100+!

So what did we do I hear you ask? For us it was a no brainer, we have a great tenant who has been in the property for over 7 years, treats it as her own (she is a single, middle aged lady who initially had her daughters at the home with her, but now is there alone) and who we know would struggle to find an equivalent rental in this market if we did not renew so it was an easy decision for us to offer a renewal of $20 pw (still large in our eyes but we felt fair) which she signed up to within a couple of hours.

We did this despite seeing, since October 2019, our interest costs on this property go up 116% ($11,200pa) whilst only passing along a 4% ($780pa) rental increase to our tenant over that same period.

Yes, we could have tried to recoup more from our existing tenant or not renewing and grabbing one of the many people we know would be queuing up to secure a property like ours however the combination of it just not passing the “sleep tax test” (as one of your guests so well put recently) as the right thing to do and knowing this is a long term play where we have built up our buffers (in part thanks to your teachings) over the years that allow us to ride out this period, do the right thing by our tenant, and still be on our path to being self funded retirees in the next 5-10 years.

Anyway, sorry this has become such a long email but I felt the need to share and confirm what you have been saying over the last few months – not all property owners are bastards, many of us genuinely play the balancing game of trying to set ourselves up to be comfortable (not outrageously rich) in retirement without being a financial burden on society.

We are also very aware that at the end of the day there is a person/family calling our property home that needs to be treated respectfully as well.

I hope it helps in what you are doing [and if you want to share it in any way that assists I am happy for you to do that if you could just keep us reasonably anonymous with anything you might make public].

Thanks, keep up the good work and of course “Go Crows!”

 

Free Stuff Mentioned

  

Timestamps

  • 0:00 – Property Managers: Are They Worth It?!
  • 6:24 – Calling all Summer Series guests! ☀️ 
  • 8:01 – A little teaser about a NEW course coming out… 
  • 8:56 Mindset Minute – The 2 master skills for an extraordinary life 😊
  • 12:40 – Q1) Saving $$ through getting rid of the property manager 
  • 15:05 – The 3 Buckets 🪣 
  • 15:53 – What risks do you run with tenants?  
  • 21:10 – The Basics vs. The Rest  
  • 23:14 – Limited Growth: It’s human nature! 🌱 
  • 24:33 – Insurance, Tax & Fools Gold?!  
  • 27:55 – In summary, our answer is…  
  • 29:03 Q2) Investment Deductions when moving to PPR 
  • 29:49 – THIS is considered second hand 😮  
  • 31:50 – What we’d recommend! (Read the report from BMT here!)  
  • 33:38  Q3) Moorr: Money management with business AND partner 
  • 35:39 – Household vs. business incomes: Why does it matter?!  
  • 38:29 – A lot of people don’t realise Moorr has THIS capability!  
  • 41:23 – Transparency & finances in early relationships  
  • 43:03 – ANOTHER SNEAK PEEK!!! 😉  
  • 46:24 Q4) Property Investors as Small Business Owners 
  • 50:34 – The Real vs. Fake narrative being sold… 
  • 52:10 – Findings from PIPA’s 2023 Sentiment Survey  

And… 

  • 56:08  Lifehack: Save videos to watch later!  
  • 58:38 What’s Making Property News: Ben was at the Victorian Inquiry!  

Bonusisode with Julia – Tax Planning Tips to Maximise your Returns (Part Two)

Folks we’re back to finish what we started… 

In last week’s Bonusisode we featured Part One of Tax Planning Tips to Maximise your Returns and now, we’re back to give you the rest of the gold!  

We’ll be unpacking… 

  • How to claim travel expenses related to work (especially if you’re a rental owner!)  
  • Is it possible to successfully act as your own accountant and claim travel expenses for properties? Hint: you need to prove this ONE thing to be eligible…
  • The 2 key ways to keep a travel record (Plus Ben gives a life hack which makes recording 100% easier!)   
  • How to determine if you’re eligible for Building Depreciation + when should you get a Tax Depreciation Schedule?!  
  • What’s included when claiming plant and equipment depreciation!? 

Julia also shares an extremely handy tax tip (Just see how excited it makes Ben!)  for those who’ve missed out on creating a property depreciation schedule… 

Spoiler: You may be able to go back and AMEND past tax returns to gain access to these benefits! 

And lots more! So before you get start lodging any tax returns for 2022, listen to this first folks!  

p.s. If you are looking for an experienced and qualified tax accountant, you can reach out to us here 👉 https://thepropertycouch.com.au/tax

Free Stuff Mentioned…

 

Here’s some of the gold we cover… 

  • 1:54 – The 2 ways to keep a travel record  
  • 4:40 – Which record is best for you??  
  • 5:10 – We’re setting THIS common myth straight… 
  • 6:25 – Deducting taxes from travel related to work – what is claimable?!  
  • 8:27 – Can Realtors claim travel expenses?  
  • 9:15 – Defining normal workplaces and being itinerate  
  • 12:15 – Essential rules for transporting others  
  • 13:09 – Recap! (Plus, how to make recording your logbook easier!)  
  • 14:50 – When is TOO LATE to start a logbook?  
  • 16:19 – Successful & unsuccessful examples of claiming travel expenses for Rental Properties!  
  • 19:40 – Should you get an accountant or DIY with a private ruling?  
  • 20:50 – The 3 Key Takeaways…  
  • 25:13 – Is your property eligible for Building Depreciation?  
  • 28:10 – Should you get a Tax Depreciation Schedule?! 
  • 30:20 – The who, what, when and why of SCRAPPING   
  • 32:44 – Plant and Equipment Depreciation: What’s included??  
  • 36:18 – When should you get a depreciation schedule?  
  • 39:25 – Missed out on a schedule? Listen to this for a HOT tip!  
  • 42:50 – So.much.free.stuff!!  

 

Episode 351 | Why The Cost Of A Brick Can Get You More Cash Back! – Chat with Bradley Beer

Did you know that the BRICKS on your investment property actually influence the amount of tax depreciation you can claim?

… Wait, what!?!

Yep. Here to unfold the tax secrets only Quantity Surveyors know about is none other than Bradley Beer, CEO of BMT Tax, the largest and most trusted quantity surveying firm in the country.

Basically, Brad is going to walk you through the little-known legalities of depreciation – and how much you can really claim when the totality (and history!) of your investment property is considered. Handy hint: a LOT of investors are leaving money on the table when it comes to this!

Co-hosting today’s episode as part of our AweGuest Series, Brad Beer is THE expert you want to hear from when it comes to tax depreciation claims – to give you an idea, his company has completed almost 750,000 depreciation schedules for property investors… so let’s just say he knows more than the “ins and outs” of how to maximise the cash you can get back while still staying on the right side of the law!

A bit more about today’s co-host: Aside from working with BMT Tax Depreciation since 1998, Bradley Beer is also a member of the Australian Institute of Quantity Surveyors, the Royal Institute of Chartered Surveyors and the Auctioneers and Valuers Association of Australia, which means he contributes to the latest information within the quantity surveying and the property industry in Australia. His knowledge as both a quantity surveyor AND property investor means he is a highly sought-after speaker and regularly features in national events, conferences and the media to share his knowledge with the wider property investment community.

 

So. WHY can the cost of a brick get you more cash back???

Tune in now to find out, folks!

 

Free Stuff Mentioned

Hust a quick update on our NEW TAX SERVICE as well folks, the response rate had been really good! So Bryce has asked our Tax Accountants to free up their calendar and move things around so that we can help more of The Property Couch Community! So if you are on the hunt for a specialised property tax accountant, simple fill in the form below and we’ll get in touch with you very soon. 😉

  • Please select your type of Tax Return

  • If you've engaged our services before, tick the checkbox below:

 

10 Mission-Critical Answers You’ll Get…

  1. WHAT is property tax depreciation?
  2. WHY is it important for investors?
  3. WHO is a quantity surveyor and why do they get involved in providing depreciation schedules?
  4. … But doesn’t an accountant look after depreciation!?!
  5. Is it worth getting a depreciation schedule for OLDER properties?
  6. HOW does depreciation work when renovating?
  7. WHEN should an investor be thinking about property depreciation?
  8. What can an investor do if they have been missing out on depreciation deductions?
    • Can they go back and get and missed deductions?
  9. How can an investor find out if getting a depreciation schedule completed will be WORTH IT?
  10. What is involved in preparing a tax depreciation schedule?

 

 

The Listener Questions We Answer

Question from Sharon Paterson on “Improvement or Repair” For A Leaking Hot Water Service

Hi Bryce and Ben, my name is Sharon, and I’ve been listening to your podcasts now for quite a few years and I love listening to them every week. My question is probably for Julia or for Brad –it’s in relation to replacing a hot water service. It was leaking so it had to be replaced, it wasn’t an improvement, and because the cost was nearly $1800, I am just wondering if that can be written off against my tax or do I have to depreciate it?

 

Question from Mick on “Improvement or Repair” For Replacing Cracked Tiles On Roof

Hi Brad, just a quick tax depreciation question from me. We have an investment property that’s getting on age a little bit now and has a concrete tile roof. Some of the tiles on this roof are cracked and need to be replaced, charge for facing is they are beyond repair and

we’re finding it difficult to source tiles to replace them with. Say the recommendation from our builder is to reroof the house with Colorbond… can we claim this as capital works or can we claim it as a repair? We’re hoping we can claim this as a repair because we’ve been told that the roof is not replaceable. Any advice would be appreciated. Cheers!

 

 

Question from Leonard on How To Choose A Quantity Surveyor

Hi my name is Leonard and I’ve got a question for Brad Beer. Hi Brad, how should investors go about choosing a quantity surveyor to work with? What can a good quantity surveyor do that a not so good one can’t? And if depreciation values are determined by a set of rules, isn’t the outcome going to be the same anyway regardless of who we work with? Is it just a matter of picking who provides the best price? Thank you very much and looking forward to your response.

 

 

Question from Leonard on Turning PPR Into A Rental

Hello everyone, my name is Leonard and I have a depreciation question for Brad here. We have a PPR which we have lived in for three years. We are the first occupiers as we

bought it new. Next year, on the 4th year, we will move out and turn our PPR into a rental property. I have 2 questions.

First, how many years of depreciation deductions do we have remaining on the property? Will it be 40 years starting from the time it became a rental? Or 37 years as the depreciation had already commenced when we lived in the property but it was just not claimable as a tax deduction?

Second question: will we still able to claim depreciation on the fixtures and fittings because the property is rented out for the first time?

Thank you.

 

Question from Kim on Overcapitalising?

Hi this is a question for Bradley Beer. Bradley, I wanna know, I often hear people overcapitalising on their investment or even their home property— is there a general rule you think clients should stay with for insuring that they don’t fall into this trap of overcapitalising? Thank you!

 

 

 

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