Facts to Calculating Investment Property

To calculate your investment property depreciation for most assets you apply the general depreciation rules. Using an investment property calculator Sydney, the general depreciation rules set the amounts (capital allowances) that can be claimed, based on the asset's effective life. Using an investment property calculator Sydney, you can calculate using either the prime cost method or the diminishing value method. In some instances, you must use the same method used by the former holder of the asset such as if you acquire the asset from an associate such as your spouse or business partner. For some intangible depreciating assets, including investment property, you can only use the prime cost method.

Depending on your circumstances, you may need to consider other costs which includes:

·         Fees from an accountant when you file tax returns to help you calculate rental income and expenses

·         When a tenant moves out, you need to find a new one

·         Renovation costs to attract prospective tenants

·         Land tax on your investment property that is payable to the government

·         The cost of utilities, services and other expenses to ensure the property is in top condition for your tenants

·         Other legal fees

Using an investment property calculator Sydney for income tax, capital gains tax (CGT) and goods and services tax (GST) when you own an investment property, there may be implications. You must keep all records so you can work out what expenses to claim as tax deductions and be sure to declare all your rental-related income in your tax return. If you have an investment property that is not rented or available for rent, then the property undergoes to CGT in the same way as a rental property is. However, you cannot claim income tax deductions for the costs of owning the property because it does not generate rental income. You can include costs of ownership in the property’s cost base, which would decrease any capital gains tax liability when you decided to sell it. As the owner of an investment property, you can claim a tax deduction on related expenses while your property is rented out. Also, you can claim immediately management and maintenance costs including interest on loans. There are some things you can’t claim on an investment property and one of them is stamp duty. Stamp duty on the transfer of a property under the leasehold system is deductible.

Moreover, if you bought an investment property after that date unless it was a new property, you won’t be able to claim a deduction for depreciation on depreciable assets in the property which could cost you thousands in depreciation claims, reduce your overall rental property deductions and thereby increase your tax bill. The law aims to minimize the widespread practice of rental property owners buying old properties and then obtaining depreciation or quantity surveyor reports that provide a high valuation of the property’s assets for depreciation. If you acquire a property, live in it and then later rent it out.