Tax Tips To Maximise Your Return | Century 21

It’s mid-winter. This means rugging up on chilly nights, lighting the fire and diving into the paperwork to complete your annual tax return. The end of financial year (EOFY) has come and gone and you have until October 31 to lodge your return or fines may apply. If you need more time, you will need to speak with your tax advisor or accountant to obtain an extension. Following some handy tax tips can also help you maximise tax return time. 

Whether you are a homeowner or property investor, there are tax minimisation strategies you can utilise to reduce your tax burden and perhaps even receive a healthy tax refund. Here are some deductions you need to consider.

For owner-occupiers

While property investors have many more deductions they can claim at tax time, as a homeowner you have some options if you use your home to generate income. 

1. Home office expenses

If you work solely from home, and have a dedicated home office space you may be able to claim deductions for:

  • A proportion of your rent or mortgage payments
  • Home and contents insurance
  • Utility costs (gas and electricity)
  • Maintenance costs related to your home office
  • New office equipment and furnishings purchased in the last financial year
  • Depreciation on office equipment such as computers and printers
  • Work-related phone and internet costs
  • Work-related car costs and other travel costs 
  • Office sundries (printer ink, copy paper etc) 
  • Your accountant’s fees 
  • Cleaning expenses 

Even if you do some work from home over the telephone or via the internet and you have a dedicated home office you may be eligible for a proportion of these deductions. 

If you work solely from home, but don’t have a dedicated home office, the deductions you can claim reduce. So why not think about creating a home office somewhere in your home, such as a nook under the stairs or a separate studio in the garden? 

2. If you rent out a room

If you rent out a room to a boarder or for short-term accommodation for travellers, then you can claim deductions for expenses directly related to your rental income. You can claim full deductions for expenses related to the room occupied by the tenant/s and a proportion relating to common living areas the tenant/s can access. Speak to an accountant to make sure you have all the details. 

For property investors

If you have an investment property (or more than one) rented out to generate income then you can claim a slew of deductions at tax time. 

Depending on your property, these could include: interest on the mortgage, bank fees, advertising costs, property management fees, body corporate fees, essential repairs and maintenance costs, cleaning and gardening costs, asset depreciation, land tax, legal costs, landlord’s insurance and council rates and water charges. 

There are other costs, such as improvements to the property that are not essential repairs, that can’t be claimed until you sell the property and can be deducted against capital gains tax. Be sure to keep separate files for these costs.

Following the 2017 Federal Budget announcement in May, property investors will no longer be able to claim tax deductions for travel expenses to visit their property. You are able to claim these costs for the 2016/2017 financial year but not in future years. 

Where to get more help

If your tax return is at all complicated then it’s best to seek qualified advice from an accountant or registered tax advisor in order to maximise tax return time each year. The ATO (Australian Tax Office) also has a comprehensive website with a range of online tools to assist you with your tax return and work out the expenses you may be eligible to claim. You can also use the site to lodge your return online. 

Follow these tax tips, seek expert advice if needed, and a most welcome tax refund may just come your way in the near future.

RBA leaves cash rate on hold at 1.5 per cent but for how long

RBA rate hold: 1.5%

CENTURY 21, a real estate organisation with over 100,000 staff in 78 countries, believes that whilst the Reserve Bank of Australia (RBA) has decided to leave cash rates on hold for now, Australians would be wise to prepare for rate hikes in the short to medium term. 

“Last month the US Federal Reserve raised interest rates for the third time in six months,” said Charles Tarbey, Chairman and Owner of CENTURY 21 Australasia. 

“While Australia’s monetary setting is higher than that of the US, the ongoing strength of the Australian economy has many pundits suggesting that rate rises may be around the corner. 

“With this in mind, people might want to consider creating a buffer within their loans while ensuring they don’t overextend themselves when making property purchases,” said Charles Tarbey.  

The RBA noted in minutes from last month’s meeting that the Australian economy is expected to strengthen gradually. The broad-based pick-up in the global economy is continuing, and the rise in commodity prices over the past year has boosted Australia’s national income.

The CoreLogic Quarterly Auction Market Review has reported that clearance rates across the combined capital cities fell 3.1 per cent, from 74.8 per cent over the first quarter to 71.7 per cent at the end of June quarter this year.

CENTURY 21 encourages potential buyers who are looking to purchase real estate to ensure they have obtained the appropriate professional property and finance advice before doing so.

With over 3,000 offices, CENTURY 21 is the largest real estate sales organisation in the Asia Pacific region, a region vital to Australia’s continued economic success.

What Is Zoning? | Century 21

What Is Zoning?

Every piece of land in Australia is subject to zoning regulations, so when you buy a property it’s important to be aware of its zoning and what that means in terms of what you can and can’t do. Can you extend the home, for example, knock down and rebuild or add a second dwelling? If you are not aware of the zoning laws and their implications before purchasing a property, then your future plans for it may well be skittled. 

So, what is zoning and why is it important to know about it?  

Both State and local governments enact zoning laws in order to regulate the use of land and buildings to control growth patterns and manage land use.  These zoning codes set out what is legally permitted on each block of land. 

How zoning could affect you

Major zoning categories include commercial, industrial, mixed-use, residential, agricultural and public use. From there, more specific codes can apply as well as “overlays” relating to heritage, flood mitigation and bushfire requirements. 

If your property is in a heritage zone, for example, there may be significant restrictions on renovations you can make to your home. If the land you are considering purchasing is in a high bushfire danger zone, then building a house on it will attract major additional costs to meet the local council codes. If buying a house in a flood zone, you may find your home and contents insurance premiums are exorbitant or that you cannot insure for flood damage at all. If you are planning to build on flood-affected land you may find that your local council requires that the home be built atop a high mound of earth, or that no building work is allowed at all. 

It’s not only important to know the zoning on the property you are looking to buy. It’s best to spend some time checking on zoning in nearby areas as well. The home you are interested in buying may be zoned as residential but if nearby land is zoned for a specific use, such as a factory or abattoir, or for high-density housing, the property may not be your cup of tea after all. 

Do your research 

Most state governments have websites which allow you to quickly find out the zoning for a particular address. From there, it’s best to speak with a local council planning officer to find out more details, including any potential rezoning in the local area that may be in the works. You don’t want to have grand plans for your new home, only to find out too late that you are not able to progress them or that a high-rise apartment block will be overshadowing you in the future. 

By understanding your local zoning laws, you are equipped with the knowledge you need to buy the right property, knowing what you can change to the current residence, what you can build, how large it can be, what the setbacks from boundaries need to be and much, much more. You can also find out about potential and planned changes in the local area that could impact your lifestyle or the future value of your property in either negative or positive ways. 

If you are buying via a Century 21 real estate agent, you will find that he or she is an expert in zoning laws and planned developments in the local area. If you have engaged a Century 21 agent to sell your property, you will find that he or she will advertise the property correctly for its zoning and be able to fully inform intending buyers on all zoning issues they might ask about. For more information, get in touch with the friendly and experienced Century 21 team today.