Property Management Newsletter 2024
Just Leased
Our Property Management team continue to provide fantastic results for our clients throughout 2024 With an average days on market currently sitting at 11 days We love exceeding expectations for our clients
44 Aspiring Dr, Huntly 4 2 2
Beds Baths Cars
Brand new home, fully landscaped.
This contemporary brand new rental property in Huntly boasts four spacious bedrooms, two sleek bathrooms, and two inviting living areas, all set amidst lush, large fully landscaped surroundings, perfect for modern family living
Leased
$490 per week
140 Neale St, Flora Hill
3 1 1
Beds Baths Cars
Charming 3-Bedroom Home Near School and Uni
Elegant 3-bedroom home, freshly updated with a modern kitchen and bathroom, ideally situated close to Bendigo South East College and La Trobe University Enjoy a fully enclosed backyard complete with a shed.
Leased
$450 per week
39 Hargreaves St, Bendigo 3 2 2
Beds Baths Cars
Period Charm Meets Modern Excellence on City Fringe
Perfectly positioned between Lake Weeroona and the CBD, this stunning, light-filled period home has been thoughtfully renovated throughout. The tasteful design features and quality finishes offer the perfect blend of timeless charm and modern living
Leased
$595 per week
Why insurance claims get declined
It simply isn’t covered.
What’s the top reason a claim isn’t paid? Well, it’s usually because a policyholder is claiming for something that actually isn’t covered under the terms and conditions of their policy
When you take out a landlord insurance policy, these are the things that are genuinely not covered, and therefore unable to be claimed on:
– Wear and tear
– Routine maintenance and repairs
– Broken down appliances – Loss of rent due to market conditions
The policy isn’t valid
Typically, an unpaid (generally the insurer won’t assess the claim until payment is received), lapsed, or cancelled policy is considered invalid. If the premium hasn’t been paid or if the policy has been cancelled, then it stands to reason that there is no cover.
The wrong policy is in place
There are different types of insurance policies to cover different letting situations. For example, if you rent a property short-term on Airbnb you will need a different policy than one that is designed primarily for a home that is rented out long-term.
The policyholder doesn’t meet their obligations
When it comes to an insurance policy, the policyholder has obligations to fulfil. If the policyholder fails to meet those obligations, their claim can be void or the pay out reduced.
No supporting evidence
Finally, claims need to be proven. This means, you need to provide some evidence of a financial loss –and what led to it. For example, if you ’ re putting in a damage claim, you’ll need to provide photos/videos of the damage.
ATO target rental property owners
This initiative aims to address common issues related to rental income reporting and deduction claims, ensuring that property investors adhere to the tax laws. Here’s a comprehensive look at what rental property owners need to know about these new targets.
Focus Areas for 2024
Accurate Reporting of Rental Income:
The ATO has identified that a significant number of rental property owners underreport their rental income. This includes not declaring all rental income received, such as money earned from short-term rental platforms like Airbnb. The ATO will use data-matching techniques to cross-check income declared on tax returns with data from financial institutions, rental bond authorities, and online platforms to identify discrepancies.
Correct Deduction Claims:
Over-claiming deductions is another area of concern. The ATO is scrutinising claims related to:
– Repairs and Maintenance: Deductions can only be claimed for costs that are directly related to the rental property and are not capital improvements.
– Loan Interest: Only the interest on loans used to purchase the rental property or for renovations can be claimed
– Depreciation: Ensuring that depreciation deductions are only claimed on assets that are genuinely used for rental purposes and that owners follow updated guidelines for claiming such deductions
Apportionment of Expenses:
For properties that are only rented out part-time or where only part of the property is rented out (e g , a room in a house), owners must correctly apportion expenses This means that if a property is used for personal use for part of the year, expenses must be adjusted accordingly Capital Gains Tax (CGT) Compliance: The ATO is placing emphasis on ensuring that rental property owners correctly report capital gains or losses when they sell their rental property This includes proper calculation of the cost base and ensuring that any exemptions or discounts are correctly applied
Enhanced Data Analytics and Technology
The ATO is leveraging advanced data analytics and machine learning to identify non-compliance. By cross-referencing information from various sources, the ATO can detect patterns and anomalies that may indicate underreporting or over-claiming. This proactive approach means that rental property owners need to be more diligent than ever in maintaining accurate records and ensuring compliance.
Consequences of Non-Compliance
The ATO has made it clear that it will impose penalties on those who fail to comply with tax laws This can include fines and interest charges on unpaid tax. In severe cases, deliberate evasion can lead to legal action. By adhering to the ATO’s guidelines and ensuring accurate reporting, rental property owners can avoid these repercussions.
Preparing for End of Financial Year
As the financial year draws to a close, there are several steps you should take to ensure that your investment property is well-prepared for tax time:
– Review Your Property Portfolio:
Evaluate how each property in your portfolio is performing Consider the rental yield, the potential for capital gain, and the tax implications of selling a property or increasing rent
– Maximise Pre-Payments:
Where possible, consider pre-paying some of the upcoming year ’ s expenses, such as insurance or property management fees, to claim deductions in the current tax year.
– Update Depreciation Schedules:
If you haven’t already, engage a quantity surveyor to prepare a tax depreciation schedule. This will ensure you claim maximum depreciation deductions available on the property and its fittings.
Effective tax planning is a year-round process that requires keeping up-to-date with current legislation and taking proactive steps to ensure all potential deductions are realised By working closely with a knowledgeable property manager and a qualified accountant, you can navigate the complexities of property investment and turn tax time into a rewarding part of your investment strategy.
Krystal EveryProperty Manager
Introducing Krystal Every.
Krystal brings extensive experience and a deep understanding of the property market. She is dedicated to providing exceptional service, ensuring that each investment property under her care achieves its full potential.
Krystal understands the unique needs of each property owner and tenant, ensuring a personalised and effective approach.
For any property management needs or to discuss your investment goals, feel free to contact Krystal on 0455 554 314 or via krystalevery@mcgrath.com.au.
