It is a totally different financial year for both employees and employers. For most of us, it could be a tough year. In the real estate industry, property transactions slow down but it is still happening. Therefore, we hope this blog will give you some valuable information for your tax return for this unprecedented year.
When can I claim tax?
Tax season starts on 1 July, you can officially start to lodge your tax returns. The tax season will last for three months. In other words, it ends on 31 October 2020. According to ATO, your tax refund date should be roughly 14 days after your lodgement date.
How to claim?
You can either claim tax by yourself or through a qualified tax accountant in Australia. Furthermore, you can claim tax on Mygov.com under your personal account.
What can you claim?
For employees who work from home, you can claim a wide range of deductions including phone and internet expenses. For more information, you can visit here. Most importantly, for property investors, you are eligible to claim deductions against the expenses related to your rental property, starting from the date you rent it out. For example, Rental advertising costs, loan interest, council rate, strata fees, and building depreciation.
What is Building depreciation?
There are two types of depreciation that you can claim on your investment property that is being rented out: building and plants & equipment. It includes construction costs to the building, renovation cost, carpets, blinds, and furniture, etc. Depending on the construction date of your building, if it was built before 16 September 1987, you won’t be able to claim depreciation on the original building cost.
Similarly, you can’t claim depreciation deductions on renovations that took place before 27 February 1992, but you can claim deductions on structural improvements that took place after this date, at a rate of 2.5% for 40 years.
Now that you have a basic understanding of when, how, and what to claim for your tax. As a result, you should start getting an appointment with your accountant and collect all the receipts of your expenses. Also, you might need to order a tax depreciation report for your property so that the quantity surveyor can book a site inspection for you.
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