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Investment Advice

Tax advice for property investors – by Anthony Keane



Ipswich Investor, Investment properties, Property Management, Real Estate Ipswich, Mortgage Broker Ipswich, Ipswich property market, Ipswich Rental Properties

CALCULATORS … on your marks. Now’s the time that many serious real estate investors are finalising and sending off their tax returns – if they haven’t already – and hoping to receive a handy tax refund within weeks.Ipswich Investor, Investment properties, Property Management, Real Estate Ipswich, Mortgage Broker Ipswich, Ipswich property market, Ipswich Rental Properties

Australian Taxation Office data suggests two-thirds of Australia’s 1.8 million rental property owners report a tax loss on their properties – with those losses totalling more than $13 billion nationally.

While property investment is a marathon and not a sprint, at this time of year it can be financially worthwhile being quick off the blocks. However, sometimes it resembles an obstacle course that can trip up the unwary.

The ATO uses advanced data matching technology to check that investors are not lying or over-claiming in their tax returns. But nobody tells you if you have under-claimed, which is effectively donating your money to the government, so it pays to seek expert advice from a quantity surveyor, accountant or both.

Here are some obstacles that can trip up property investors at tax time:

REPAIRS VERSUS IMPROVEMENTS: A common mistake is to try to claim an improvement to a property as repairs and maintenance and book an immediate tax deduction. In fact, they are capital works deductions and must be claimed over several years.

DEPRECIATION: Everything in an investment property loses value, except the land component. Investors can write down things from carpets to curtains to hot water systems, and it’s a great idea to get help with this from a quantity surveyor. Their depreciation reports cost about $600, which is tax-deductible itself but will most likely save you thousands.

BUILDING COST: Forgetting to write down the value of the building cost can mean missing out on thousands of dollars. Buildings can usually be written off over 40 years, at a rate of 2.5 per cent a year, so a $200,000 building delivers a deduction of $5000 a year, and it doesn’t strip one cent from your pocket.

TRAVEL EXPENSES: The ATO says a common mistake is to claim a tax deduction for travel costs to visit a property when the main purpose of the trip is to have a holiday. You may only be able to claim expenses directly related to the property inspection and a proportion of accommodation costs, it says.

CHASING A LOSS: Tax losses can deliver a nice windfall, but the aim of all property investment should be to earn more income than you pay in expenses. A tax loss is still a loss that is costing you money. Aim for profit, eventually, and in the meantime claim all you are legally entitled to.

It can be a tricky obstacle course, but unlike that crazy steeplechase event that causes soggy shoes, tax time doesn’t have to be uncomfortable.

In fact, many investors will find it to be their favourite time of the year.


Original article published at by Anthony Keane, the Advertiser 2/8/2013

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Investment Advice

Superannuation property fund ISPT invests in Brisbane malls





On behalf of its ISPT Retail Property Trust (IRAPT), ISPT is buy a 3741sq m property in Springfield and a 4889sq m neighbourhood centre in Ipswich.

Both were growing areas supported by strong residential catchments, said IRAPT fund manager Cameron Gregson.

“Obviously the quality of the anchor tenants in both centres also was a drawcard for IRAPT,” he said.

The Springfield property comprises of a 3200sq m supermarket leased to Woolworths on a 20-year lease, along with eight specialty retail outlets.

The Ipswich centre, located just 2km from the Ipswich CBD, has a 15-year lease commitment from Coles to open a 4200sq m supermarket in June 2017.

The two properties will be developed by Brisbane private property group Citimark, which has $1.5 billion of diversified development book focused on southeast Queensland.

“IRAPT’s decision to acquire both the Silkstone and Springfield retail centres is a huge show of confidence in these projects and the southwest corridor (of Brisbane),” said Citimark’s director of commercial and retail Jonathan King.

McNab Constructions has been appointed to build the Springfield centre, with completion expected in May 2017, while Hutchinson Builder will build the Ipswich Centre.

Sam Hatcher from JLL and Craig O’Donnell from CBRE managed the sale.


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Investment Advice

Low interest rates cuts negative gearing ATO investor claims in 2012-13



Low interest rates cuts negative gearing ATO investor claims in 2012-13

Low interest rates cuts negative gearing ATO investor claims in 2012-13

Record low interest rates have shown up in new statistics from the Australian Taxation Office, in a sizable drop in negative gearing tax claims by property investors.

Claim for rental properties fell from around $13.8 billion to $12 billion between the 2011-12 and 2012-13 financial years.

The latest statistics for 2012-13 show that 1.26 million people deducted losses made on investments (including mortgage interest) from their overall income, from the 12.7 million lodged individual tax returns.

The overall cost of negatively-geared rental properties has fallen by $2.4 billion, or 31 per cent, in 2012-13, due to record low interest rates and higher rents.

The Tax Office’s latest statistics shows 1.9 million landlords.

The value of rent returned was up 8.6 per cent to $36 billion but the value of interest claimed was down 6.7 per cent to $22 billion.

While the number of landlords with negatively-geared properties increased by almost 60,000, their tax deductions fell 13 per cent.

​The highest number of property investors claiming tax deductions had a taxable income – after tax deductions – of between $37,000 to $80,000 a year.


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Investment Advice

How investor Nautilus nearly doubled money on property in 18 months



How investor Nautilus nearly doubled money on property in 18 months
How investor Nautilus nearly doubled money on property in 18 months

Nautilus purchased this complex of 10 industrial buildings at 93 Burnside Road, Yatala, Brisbane, 18 months ago. Photo: Supplied


Nautilus Investments Corporation has made a 75 per cent gain on the value of an industrial property in less than 18 months after fully leasing half empty buildings and selling them off to Sydney-based fund manager Ringmer Pacific.

The Melbourne-based Nautilus purchased the complex of 10 industrial buildings at 93 Burnside Road Yatala, south of Brisbane from receivers in mid 2013 for $10 million.

It has now sold the asset for $17.45 million reflecting a yield of 8.94 per cent.

Savills’ Callum Stenson and Myles Clentsmith negotiated the deal following an expressions of interest campaign that attracted over 50 buyer enquiries and five offers to purchase.

“This was about being prepared to take on the risk profile,” Mr Stenson said. “When they first bought they were looking for something high return, high risk.”

“The complex was in disarray when Nautilus bought it. It had 57 per cent vacancy, there was outstanding infrastructure charges and no certificate of completion,” he said.

“At the time there was plenty of money but limited confidence – people were sitting on their hands, but those who stepped up have reaped the benefits.”


Nautilus spent 18 months fixing the issues, securing new tenants and presenting the 14,500 square metres property back to the market fully leased.

A similar strategy is now being actively taken up by commercial real estate groups such as Lend Lease’s Australian Prime Property Fund.

That fund snapped up an empty ­Bunnings Warehouse in Brisbane in July last year for $21.27 million and Hills Limited’s headquarters for $15.6 million which is to be vacated next year.

Sydney-based fund manager Ringmer Pacific, which purchased the Nautilus asset, said the property has a prime location.

Ringmer Pacific’s Giles Austin said: “The 93 Burnside Road property provides extremely flexible accommodation for local businesses that will be able to adapt to changing tenant needs in this key growth corridor linking the Gold Coast and Brisbane.”

by Matthew Cranston

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