Hi All.
Welcome to my new website blog. This is where I will be sharing information and answering clients questions on a whole range of topics from Accounting, Taxation, Property Investment, SMSF and Financial planning.
I look forward to hearing from you.
Catherine Smith
Hi Catherine
ReplyDeleteWhere do you sell property? i am looking to invest and want to know where to buy.
Phil
Hi catherine
ReplyDeleteThis is a great idea. Have a merry Christmas.
Jenny
Hi Phil,
ReplyDeleteGenerally, most investors are looking at the west of Melbourne due to price affordability and demand. Many of our clients are also looking at American property. We are holding regular seminars on this fantastic opportunity. I personally have jumped in and brought in America.
Catherine
An SMSF can be used to buy American property. A lot of our clients with small balances (50k or so) are rolling out of the industry funds, setting up an SMSF and buying American property. The major issue you will hear other commentators say is that the costs of SMSF's are prohibitive if you have a small balance. WFS Canberra has overcome this by charging only 1% of the SMSF up until the fund reaches $250,000. For example; a fund with only $50,000 will only be charged $500pa. This is far cheaper than the fees that this same $50,000 will incur if left in a retail superannuation fund.
ReplyDeleteIs now a good time to Buy in Australia with the way interest rates are going?
ReplyDeleteKate
Hi Kate, I have always relied on the old adage it is not 'Timing' the markets that counts but 'Time IN' the market that counts. So it is not wise to sit back and wait for fear of rate rises. Rate rises can actually have a beneficial affect on the property market as when rates rises, rents also rise, which increases the cash flow on the property. The important thing about buying now, is to ensure you select very carefully. WFS Canberra can help you with this.
ReplyDeleteHi
ReplyDeleteI am interested in purchasing an American property in a SMSF. Can you do the setting up of this for me. and how hard is it?
Thanks
Murray
I have just purchased a rental property. I have heard that depreciation is one of the largest deductions for rental properties,but I am not sure how do I go about claiming depreciation. Could you please advise me?
ReplyDeleteThanks for your time,
Naomi
Hello
ReplyDeleteI am in my late twenties and was wondering if i should start contributing some of my pay to my Super?
Is this a good idea at this stage?
Regards
Hi
ReplyDeleteI have recently saved up some money and am not to sure what to do with it. Its not much money but its a start. I would like to invest it where I could get a good return.
Thanks
Hey there,
ReplyDeleteI have been told to hold onto my children's library contributions receipts. Can I claim them? and if i can where in the Tax Return can I claim them?
Thanks,
Sandra
Hello Catherine,
ReplyDeleteI am a little confused as I wish to claim car parking for my work and I recently heard that I can't. I work in the Canberra Centre and pay for parking everyday! can you please clear this up for me?
Regards,
Chloe
Hello Again Catherine,
ReplyDeleteSorry I also forgot to ask. I work in a surf shop and have to wear their clothes - is this deductible as a uniform expense?
Thanks again,
Chloe
Hi Murray, It is not hard at all to set up an SMSF to buy American property and we can do this for you. Setup fee ranges from $880 to $1980 depending on your circumstances. We then help you roll over your super and then buy property.
ReplyDeleteHi Naomi,
ReplyDeleteYes Depreciation is a very important claim for a rental property. ONe of the largest and best method of reducing tax and increasing cash flow. The newer the property the higher the depreciation. If you do not have a depreciation report you can order them from many different companies. We can also order one for you and teh company we use gives a guarantee that they will save you more in tax in the first year or the report is free.
Hello Anonymous, if you are in your 20's you certainly can start putting money into super if you have spare cash flow. However, I find many clients in their 20's have other goals such as saving for a house or car. The disadvantage of super is that it is locked away till you are 55. Perhaps you shoudl consider seeing a financial planner to discuss your financial goals in more detail.
ReplyDeleteHi Anonymous, If you have funds spare a simnple term deposit, or online saver account is often the safest and easiest way to invest until the funds accumulate into a more substantial amount. Once you have more than $10,000 or so you should consider seeing a financial planner to see if shares, property or super may be a better savings vehecle for you.
ReplyDeleteHi Chloe (surf shop worker) - Unfortunately you can't claim parking if you simply travel to work every day and pay for parking. You can only claim parking if you travel to different locations everyday or if you travel to civic but then your employer sends you to Fhyswick to pick something up. You coudl claim the parking whilst in Fhyswick. Also, conventional clothing is not deductible at all. You can only claim it if your employer prints it with a logo, making it distinctive from conventional clothing and you are required to wear it.
ReplyDeleteHi Catherine
ReplyDeleteCan you tell me, are the shares and property in my SMSF considered as assets in regard to Centrelink?
Thanks
Mark
Hello Catherine,
ReplyDeleteI have heard you don't need to keep a logbook if you have a Ute. I have a Van I have fitted out to carry all my tools - I am a contractor, is this fully claimable aswell? or do I need to keep a logbook?
Thanks,
Mehow
Hi Mark, I would need to more about your situation as it depends on whether you are of retirement age or not, whether the fund is in pension mode or not, and a number of other factors. Briefly, before pension age - No they are not treated as Assets, after pension age - they maybe - depending on your circumstances.
ReplyDeleteHi Mehow, That is correct - technically you don't need to keep a logbook for a Ute. However, there is a catch with that because it only applies if the vehicle is used 100% for business. If it isn't then you still need to keep a logbook. Therefore, if you were caught by the ATO using your car, even just once, for a private purpose then they could effectively disallow your entire claim. Err on the safe side and keep a log book for three months - you only need to do it once in five years.
ReplyDeleteHi
ReplyDeleteI have just bought a property and have a substantial mortgage on it. Will your company be doing personal insuurance in the future? Life insurance or income insurance would be of interest to me!
Thanks
Mike
Hi Mike,
ReplyDeleteYou should ensure you seek financial advice and consider Life Insurance and Income Protection Insurance. If you were to meet an unfortunate end, or get sick for an extended period of time, how would you meet your mortgage? I would need to know more about your personal situation such as family, kids, job, other committments etc before advising fully.
Hi Catherine
ReplyDeleteI have heard that structuring your assets into a trust will provide protection in the case that a future relationship doesn't work out. Should I set up a business and put assets in that business name?
Thanks Tony
There are many pros and cons and you are best having an appointment for an issue like this. A legal advisor can explain trusts but they will not be able to help much with tax planning issues. We establish trusts regularly for clients. Once established and structured correctly for tax purposes then your solicitor can arrange the property transfers.
ReplyDeleteIn order to maximise tax efficiency we need to consider;
1) Which properties to transfer
2) How to structure the finance for maximum tax efficiency
3) Which trust to use, Unit, Discretionary or Hybrid
4) The negative gearing issues as the loss can get locked in the trust if not correctly structured
5) Who is the applicant for the finance – the Trust or yourself and this depends on type of trust and the negative gearing issues
6) Other issues are also Capital Gain Tax on the transfer and on later sales
7) The CGT effect on your Principal Place of Residence (PPOR)
8) And if that’s not enough, there are also Land Tax issues and these vary from state to state
In others words, you need an appointment to work through it all.
Hi
ReplyDeleteI would like to increase the depreciablility of the my investment place and its value. Im thinking a deck would be a really good addition to the house but Im not sure if there are other renovations that may give better bang for my buck from a depreciation schedule perspective.
Dave
Hello
ReplyDeleteI will be undergoing some elective surgery and have been told I may be able to claim my out of pocket expenses in my next tax return, is this true. Apparently you can get 75% back.
Ellie
Hi Dave,
ReplyDeleteAll capital improvements (such as decks and most renovations) will be depreciated at 2.5% so hardly worth doing just for the sake of the depreciation claim.
Electrical goods provide a better depreciation amount – eg; new ovens and dishwashers but still the mount you get back is hardly worth spending the funds unless the items actually need replacing or repairing and if they will help you attract a better rental amount.
Eg : new over $1000 * 15% depreciation = = $150 claim * your tax rate 40% so you only get $60 back on $1000.
Regards
Catherine
Hi Ellie, No that is not correct. Elective surgery is not always claimable on tax. It depends on the type of surgery. For example; the ATO ruled out nose and boob jobs a few years ago. Even if you can claim it you get a maximum of 20% of the amount out of pocket over the threshold which is currently $1500. So don't undergo the surgery just for tax benefits as they are minimal.
ReplyDeleteCatherine
Hi Catherine
ReplyDeleteare sporting trips tax deductable? I hear that you are into dragon boating. Were there any expenses that were deductable?
Thanks Murray
Hi Catherine,
ReplyDeleteI am a student, working part-time and receiving youth allowance. I heard that we can claim deductions against youth allowance. How will it work?
Thank you!
Linda
Hello Catherine,
ReplyDeleteI use the logbook method for my car can I include the costs of car washing?
Thanks
D
Hi Catherine,
ReplyDeleteWhat is the "Australian property" that a temporary resident is exempt from capital gain tax? I understood it as Austraian real property. Does it mean that if a temporary resident purchases Australian shares which do not relate to Australian real property, he will not need to pay captial gain tax when he sells it?
Thank you!
Lin
Hi Catherine,
ReplyDeleteI am on working visa and not entitled to Medicare. How can I avoid paying the medicare levy for this year's tax return?
Joe
Hi Catherine,
ReplyDeleteWhat is the flood levy? Who will be effected by it? I am in Canberra. Will I have to pay the flood levy?
Thanks
Sam
Hi Catherine,
ReplyDeleteIs stamp duty claimable if I buy a property for me to live in and then rent it?
Thanx
G
Hi Catherine,
ReplyDeleteI have been overseas for the past two years and recently came back to Australia and had one job. Do I have to claim income that I earned while I was not in Australia for 2011 tax return?
Thank you!
Kate
Hey, I have a few questions to catch up on so I'll start from the top.
ReplyDeleteSporting expenses are only deductible if you are being paid as a professional sports person, so No I don't claim any of my Dragon Boating expenses. Besides my team is so good the Chinese Government paid for us to come. :)
Hi D, If you are using the logbook method, then ALL car expenses are included. This includes car washing.
ReplyDeleteHi Sam, The flood levy is a new levy to assist the Queensland flood victims, basically everyone will pay it other then those that have been given an exemption.
ReplyDeleteHi Lin, All Australian Assets are subject to CGT regardless of whether you are a resident or not and this includes and capital gain made on shares.
ReplyDeleteHI G, Stamp duty will not be claimable if you buy a property for you to live in and then later rent it. It is only claimable if you buy a property with the intention of renting it straight away and this is only in Canberra (ACT). It is not claimable at all in other states.
ReplyDeleteHI Kate, The answer to your question depends on a number of other factors that determine your residency status such as whether you have a permanent place of residence in Aussie, or a member of an Aussie Super fund and also exactly how many days you were in Aussie for the year. It would be best for you to make an appointment with a tax advisor to discuss this issue.
ReplyDeleteHi Catherine!
ReplyDeleteHow much money do i need in my super in order to start an SMSF?
Also can you please let me know if you assist in the setting up?
Thanks
Kate W
Hi Kate, Some commentators say you need aroudn $200,000 to make it worthwhile but at WFS we reduce our fees substantially for small funds. We charge only 1% for funds under $250,000 which means if you have $50,000 we will only charge $500 which will probably be far cheaper than you are paying your retail funds.
ReplyDeleteHello Catherine,
ReplyDeleteI was wondering if you would recommended fixing my home loan now due to the uncertain market at the moment. Some people talk about rates going up and some say it will go down. I am very confused. I don’t want to be caught out if rates increase to level seen in the GFC.
Kind regards
Amy
Hi Catherine
ReplyDeleteI'm not happy that I have no control over my Superannuation Funds. I would prefer to invest my savings in property rather than shares and was wondering if a self managed fund would allow me to do this. Can I borrow money in my Superannuation Fund to purchase a property for super purposes?
Cheers - George
Hi Amy,
ReplyDeleteI can't recommend whether you should fix or not as my psychic abilities are still under development and my crystal ball broke during the GFC. No seriously, the only time to fix is if you want to be 100% sure of your repayments into the future and don't want any uncertainty. There is a lot of speculation that rates are coming down.
Hi George, this is the very reason many of our clients set up SMSF's - to gain control over their super. They are sick of losing money in the big funds. Yes you can buy property in an SMSF. Yes you can borrow to buy property in an SMSF. Come see us.
ReplyDeleteHi Catherine,
ReplyDeleteIs it good time to invest in American property now?
regards,
Bob
Hi Catherine,
ReplyDeleteIm a doctor and work in partnership. At the end of the day i receive a cheque for work + GST on top. from april to june 2011 i earned income + GST but i am under the 75000 treshhold. do i need to do a BAS return?
Thanks
Sonal K
Hello Catherine,
ReplyDeleteI am looking to buy my first home and was wondering if I should use all my saving to purchase my first home or keep a certain portion a side as I also want to get into the property investment market as soon as possible?
Regards,
John
Hey Bob, American property is still very 'hot' and I have a very reliable source of property. You can get great rental returns up to 20%. And when America does recover there could be some serious capital gains.
ReplyDeleteHi Sonal, Yes you absolutely need to lodge a BAS and pay the GST to the ATO. You will need to register for GST and backdate the Rego till before the payments started. Because you have been paid GST you are required to register. We can do all this for you if you need. Your only other option would be to inform the 'payer' that you are not registered and pay them back the GST amounts.
ReplyDeleteHi John, It would be a good idea for you to see us and get a 'Property Portfolio Plan' completed as the answer will vary depending and a number of things. Most likley, we would recommend that you use your savings for your home and then redraw the equity for the next property using a LOC (line of credit). However, this could vary depending on your capacity to buy more properties now (income), your timeframes, etc. Come see us for more advice.
ReplyDeleteHi There
ReplyDeleteI have two collectable vintage cars which are kept mainly in storage. Can you tell me what advantage I get if I put these in my SMSF as assets? Would I be able to show them occasionally at vintage car meets and the like?
Gary
Hi Catherine,
ReplyDeleteIs now a good time to invest in property, shares or both?
Thanks
Kim
HI Dana, A very interesting question and many possible answers. Yes, No, Both. Either. It really depends on your circumstances, your needs, your risk profile and really a comment I can't make without knowing a lot more about you. I however would personnally buy more shares and more property now if I had spare funds, I would also consider US property. We can help you more if you fill in our comprehensive needs analysis.
ReplyDeleteHI Gary, Sorry it has taken me a while to answer your question about vintage cars and SMSF's as it is a grey area and I sought the advice of a few colleagues. Collectively we decided it would not be a good idea to put the vintage cars into an SMSF. They do not earn any income so may contravene the sole purpose test of the SMSF laws. If they can be proved to be an appropriate investment and therefore meet the sole purpose test you could do it but you would not be able to drive them or use them in any way.
ReplyDeleteThanks Catherine, that solves that issue. I also have some shares which I would like to put in my SMSF. If I transfer them into my fund, do these count towards my annual contribution cap? I hear the ATO is quite diligent about these.
ReplyDeleteCheers, Gary
Hi Gary, Yes the transfer of shares into your SMSF will count towards either your concessional cap ($25,000 or $50,000) depending on your age or against your $150,000 non-concessional cap (or $450,000 roll forward cap). Very confusing - happy to assist more if you want to come in for an appointment.
ReplyDeleteHello Catherine,
ReplyDeleteI am a doctor and with my work arrangement at the clinic i work, i have been earning 40% of the income + GST. I have not registered for GST is there a way i can return it to the ATO without registering? I might not go over the threshold in the 2012 fin year hence i dont want to register and then cancel. Please let me know.
Thanks
Sonal
Hi Catherine,
ReplyDeleteI need to do my tax returns but I have not done the tax returns since 1990 and lost the group certificates. Will be be able to help?
Thanks
Y
Hi Catherine,
ReplyDeleteCan I get a loan for my fist home from your company?
Brian
Hi Catherine,
ReplyDeleteI was told that 31/10 is not always the deadline for individual tax returns. Is it correct?
Ann
Hi Ann,
ReplyDeleteThat is correct. 31/10 is not teh tax deadline if you use a Registered Tax Agent. Agents have until May next year to lodge. We only need to register you on our program before 31/10. So if you need help in this regard call us on 02 6162 4546. We can help anyone Australia wide.
Hi Catherine,
ReplyDeleteI sold my house and was told I need to pay capital gain on it. What information would you need if I would like you to help with my tax return?
Thank you
Lane
Hello Catherine,
ReplyDeleteI have a number of solar panels on my roof and was wondering if I have to pay tax on the funds i receive for feeding electricity back into the grid.
Thank you
Karen
Hi Catherine,
ReplyDeleteWhat can I claim in my tax if I use chattle mortgage for my work car?
Thanks
D
Hi Catherine,
ReplyDeletewould you please explain how I can reduce my tax by put my salary into superannuation? Will it be before tax or after tax? I am 33 years now.
Thank you
SS
Hi SS, Yes you can reduce tax by salary sacrificing into super. You can save your marginal rate of tax but your super fund will pay 15% tax. You should seek advice as, at your age, it may actually be more worthwhile paying off your home mortgage or focusing on building up investments outside super.
ReplyDeleteHi Catherine,
ReplyDeleteThank for your suggestion. I am looking forward to buying my first home. What sort of arrangement should I make to make sure my finance works well for my new home?
SS
Hello Catherine,
ReplyDeleteI want to by my first home but cannot service a loan on my sole wage. do you have any options I could look at to create passive income?
Thanks
Karen
Hi Catherine,
ReplyDeleteI am paying home loan from my wages. Can I claim the interest in my tax? Thank you.
Rose
Hello Catherine,
ReplyDeleteI have a home loan and can now afford to put more onto it then the minimum. but what if I want a holiday? am I better to just put the surplus into savings? I like the idea of paying as much as possible onto the loan (thereby saving on interest) but am a little scared of "rainy days" or I may decide I want that holiday on an impulse!an you think of a better idea? or shed some light as to which option would work better for me?
Libby
Hello Catherine,
ReplyDeleteI just read that the ACT is now a hotspot for property. Is there anything different for an investor to buying in the capital, over other states?
Thanks!
TOM