In this edition: How long will it take for your prop-erty to rent? 4% gone – But There’s Always Capi-tal Works Property Depreciation – Are You Missing Out On Saving Big $$$? Repairs should never wait until later

May 2015

Tenant Rent Increases Do I or Don’t I? A Selection of Properties Recently Leased Quote Calendar of Events

Dear Landlord,

Can you believe we are in May! I am

sitting here in my office listening to the

rain falling outside with more predicted

this weekend. Are your gutters and

tree's pruned and up to date? An

important reminder to stay on top of

maintenance during these storms to

avoid flooding.

I've had the opportunity to meet some of

our landlords, both local and

interstate. How wonderful to put a face

to emails/voice. Remember if you are in

and around Bardon please call in and

say hi to your Property Management

Team.

Over the coming months I will be

sending out surveys to all our owners. It

May property manager portfolios and rental updates

is really important I get your honest

feedback so I can ensure we are moving

forward on track. There have been

many exciting changes since I started

with RE/MAX this year. We have new

p o r t f o l i o s f o r ou r P r o p e r t y

Managers. Helen who most of you know

is cutting down her hours and will con-

tinue to work on a small group of

properties. Iszabel looks after the

largest of around 120 properties mainly

on the West side of Brisbane and

Paddington. Very capable with her

experience. Myself and Lisa are covering

the North side Brisbane and

Bardon. I've taken a lot of time to ensure

your needs are met and you are

receiving the best service available.

Do you have a portfolio of properties that

we could assist with management? I

believe we can save you money and

provide additional benefits if you were to

consolidate your investment Properties

and have us manage all of your

properties on your behalf.

My door is always open and I welcome

your feedback, referrals and calls

anytime. Have a great month.

Best Regards,

Belinda Johnston

General Manager

Property Management

Iszabel Lees—Property Manager

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

How long will it take for your property to rent?

That of course depends on the time of the year so here are the latest statistics for April.

BRISBANE STATISTICS The Market

Source: rentfind.com.au

4% gone – But There’s

Always Capital Works

On the 18th of July 1985,

legislation was first introduced to

allow owners of residential

investment properties to claim

capital works deductions.

This allowed owners to claim a

loss for the wear and tear of the

structural and fixed items

contained within an investment

built between the two dates can

no longer claim the 4% deduction

for capital works.

This doesn’t mean that the

owners of properties in which

construction commenced prior to

1987 won’t be entitled to claim

any capital works deductions.

Capital works deductions are

potentially still available for any

recent renovations.

S u bs t an t i a l d e p r ec i a t i o n

deductions are also available for

property such as walls, ceilings,

roofs, windows and doors.

When the legislation was initially

introduced, owners could claim

capita l works deduct ions

(depreciation for structural items

of a building) at a rate of 4% per

year for up to twenty-five years.

However, on the 16th of

September 1987 an amendment

was made to the legislation,

where the owners of residential

properties in which construction

commenced after this date could

only claim capital works at a rate

of 2.5% over forty years from

construction completion.

As more than twenty-five years

have passed since the original

legislation was introduced,

owners of residential properties

Brisbane, QLD April 2015 Annual Change

Median Weekly Rent - House $ 420 2.4% increase

Median Weekly Rent - Unit/Apartment $ 380 1.3% decrease

Days on Market (Avg) 29.2 3.2 increase

Days Vacant (Avg) 17.1 1.9 increase

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

any of the plant and equipment

assets contained in the property.

Article provided by BMT Tax

Depreciation.

Bradley Beer (B. Con. Mgt, AAIQS,

MRICS) is the Chief Executive

Officer of BMT Tax Depreciation.

Please contact 1300 728 726 or

visit www.bmtqs.com.au for an

Australia wide service.

compliant tax depreciation report

prepared by a certified quantity

surveyor. You or your accountant

will use this report when

preparing your income tax return.

And you don’t have to wait all

year to benefit. Instead, you can

improve your cash f low

throughout the year simply by

nominating to use a Pay As You

Go (PAYG) withholding variation.

A PAYG withholding variation

allows individuals to vary the

amount of tax withheld by their

employer in each pay to

anticipate their tax liabilities. This

means that you potentially can

take advantage of the deductions

available to you regularly, rather

than waiting until the end of a

financial year for your tax refund.

You should speak to your

a c c o u n t a n t a b o u t t h i s .

When to obtain a property

depreciation report

Ideally, a depreciation report

should be obtained soon after the

purchase of an investment

property. This enables a quantity

surveyor to separate the items

The Australian Taxation Office

(ATO) recognises that the value

of capital assets reduces over

time as they approach the end of

their effective life. These assets

can be written off as a tax

deduction ie. ‘Depreciation’.

What depreciation should I be

c o n s i d e r i n g ?

If you own an investment

property (new or old, large or

small), two areas of depreciation

are available:

1. Plant and equipment

2. Capital works on the building

Different items within a rental

property have different rates of

depreciation based on the

effective life of the item. These

items are identified by certified

quantity surveyors, who inspect

the property assets and then

calculate its depreciation through

their expertise and knowledge of

which items are depreciable and

how savings can be achieved.

To claim maximum tax benefits

on an investment property the

ATO encourages property

investors to obtain a fully

Property Depreciation – Are

You Missing Out On Saving

Big $$$?

Many property investors are

missing out on beneficial

depreciation tax claims. The

frustrating thing is how often this

happens, when it really doesn’t

need to happen at all!

Tax depreciation is often an

overlooked method of obtaining

tax deductions on investment

properties. It is a big help in

enabling investors to minimise

their tax liability and improve their

cash flow. Sadly though, we often

see situations where depreciation

either isn’t maximised to its fullest

potent ia l , or worse yet ,

overlooked entirely.

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

owners stay up to date with the

intricacies of tax legislation and

can make we l l - in formed

decisions that enhance cash

flow. For instance, waiting until

just before the close of the

financial year to buy an asset for

an investment property may

entitle you to claim the full cost

on your tax return for that year.

For example, plant and

equipment assets valued at $300

or less are generally able to be

written off at 100 per cent in the

financial year of acquisition.

Moreover, under the Low Value

Pool Regulations, certain items

can be depreciated more quickly.

Items that enter the pool are

depreciated at a set rate or 18.75

per cent in the first year but in

s u b s e q u e n t y e a r s , t h e

percentage rate of depreciation

jumps up to 37.5 per cent on the

diminishing total.

What can effective property

depreciation save you?

In typical situations – say a

commercial property investment

of around $1,000,000 – using a

quantity surveyor and well-

prepared depreciation report can

result in clear benefits. Potential

included in the purchase price

from the expenses that will be

incurred by the new owner in the

future, and provide a detailed

analysis that ensures the

maximum investment property

depreciation allowances can be

claimed.

A depreciation report is critical

documentary evidence required

by the ATO to support any tax

deductions for components of an

investment property that are

decreasing in value. Al l

investment properties are eligible

to have their assets depreciated

where, generally speaking,

construction costs are incurred

after 18 July 1985 and structural

improvements are incurred after

27 February 1992. This applies

even if the previous owner paid

for the construction. In the event

that the original construction cost

data is no longer available, the

ATO stipulates that a quantity

surveyor must assess this figure.

Where to start – immediate tax

depreciation write-offs and the

low value pool

O b t a i n i n g i n d e p e n d e n t ,

professional property advice

ensures investment property

tax deductions under a well-

planned depreciation schedule

could total in excess of $27,000

in the first year of claim and over

$100,000 for a 10-year period

following the purchase of the

property. For an individual

taxpayer on the top marginal tax

rate of 49.5 per cent (2014/2015

individual tax rate), the tax saving

would be $13,365 on a $27,000

tax claim.

Of course, depreciation is only

one component of owning an

investment property and the

associated tax deductions. Other

deductions could include:

f e e s t o p r o p e r t y

management agencies

repairs and maintenance to

the property and its fixtures

interest payments on

mor tgages over the

property

council and water rates

property insurances

The total deductions can be

considerable and go a very long

way to improving your tax bill at

the end of the financial year and

throughout your years of

investment in the property.

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

Tenant Rent Increases

Do I or Don’t I?

It is our philosophy to implement

(as a bare minimum) a ‘small’

rent increase each time a

tenancy is renewed, so that it

becomes an expectation of the

tenant.

It is when a tenant’s rent has not

been increased for some years

(resulting in a dramatic increase

to meet the market rent) that the

tenant can become disgruntled.

If your preference is to take care

of your tenant and avoid

increases, we can always

communicate to the tenant that

the rent is being increased by

$10pw instead of a $25pw

market increase. WIN/WIN!

Repairs should never wait until later

Promptly attending to repairs or maintenance requests is safe, well

cared for, keeps the tenant happy, avoids disputes and the possibility

of a compensation claim.

Once our agency becomes aware of a repair request, it is our duty of

care as the appointed managing agent to take action immediately.

We appreciate the cooperation of our landlords who promptly respond

and take action.

Clearly, there’s a real advantage in obtaining a depreciation report on

your investment property. Our recommendation is to make sure you

have a good depreciation strategy, but consult your accountant and

other advisers before you finalise this!

Source: http://www.smartpropertyinvestment.com.au/,

Mike Mortlock, MCG Quantity Surveyors

15th May Mid Month Accounting 1st June End of Month Accounting

A Selection of Properties Recently Leased

South Brisbane Apartment $350 p.w.

1 bed, 1 bath Quote

“I am only one, but I am one. I cannot do everything, but I can do something. And I will not let what I cannot do interfere with

what I can do”.

—Edward Everett Hale

Bardon House $550 p.w.

3 bed, 2 bath, 1 car accommodation

RE/MAX Profile Real Estate 141 Boundary Road TEL 07 3510 5222 FAX 07 3876 5544

www.profilerealestate.com.au Bardon QLD 4065 Belinda profilemanager@remax.com.au

www.propertyrentalsbrisbane.com PO Box 388, Paddington, 4064 Helen helenbryan@remax.com.au

Lisa profilerentals@remax.com.au

Errors & Omissions: These details have been prepared by us on information we have obtained and while we trust it to be correct, is not guaranteed by us and you should rely on your own enquiries.

Kangaroo Point Apartment $360 p.w.

1 bed, 1 bath, 1 car accommodation

Calendar of Events

FREE Home Loan

Investment Health Checks

Email Joshua Vecchio -

joshua.vecchio@apfbroker.com.au

0432 989 866