Tax refunds are now trickier to get after a big change has meant landlords could miss out on thousands of dollars through one small mistake.
Real estate investors who live in their properties before renting them out are risking missing out on thousands of dollars a year of tax deductions.
The fresh warning from BMT Tax Depreciation comes as investors are already bracing for controversial changes to negative gearing and capital gains tax from January 1 if Labor wins the federal election.
BMT Tax Depreciation’s examination of internal data has found that more than one in four people live in their property before renting it out, and the proportion is growing.
New laws that came into force last financial year shut the door on investors claiming depreciation deductions for items including carpets, curtains, furniture and appliances if they didn’t buy the property or the items brand new.
"Under the new laws, if an investor is living in a property at the time the assets are installed the items will be considered previously used an cannot be claimed,” Mr Beer said.
"Our data suggests that a growing number of people are opting to live in a property while renovating and before renting it out.
If they choose to make these types of additions to their property during this time, they could lose out on thousands of dollars of tax deductions.
"Be careful not to get caught by intricate rules with legislation that doesn’t really make a lot of sense.”
Last financial year property investors claimed depreciation deductions averaging $8212 per property, Mr Beer said.
Source- https://www.news.com.au/finance/money/tax-deduction-trap-looms-for-property-investors-who-renovate/news-story/3777e53e47d1a7187a481091102ccbae
Marlene Liontis
Thursday, 11 April 2019
