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Welcome to the July newsletter.
Rental Properties
MPA has considerable expertise when it comes to tax issues involving rental properties. We have many clients who hold investment properties. We are diligent when it comes to preparing the tax returns of these client and when providing advice with respect to investment properties. We ensure all the right questions are asked and information gathered.
To assist this process we now provide some helpful information via links to relevant information that will be of interest and assistance to investment property owners. Should you have any queries regarding this material please discuss with your usual contact at MPA.
The ATO have provided a useful guide to assist with understanding the treatment of income and expenses. Whilst income is relatively straight forward there is often many questions and some uncertainty when it comes to expenses.
Click here to view the ATO guide.
The ATO have also provided information on common mistakes people make in their tax returns with rental information. MPA always endeavours to ensure our clients do not make mistakes however
click here as this information is worth reading.
If you own any property that is not your principal place of residence (your home), including a holiday house or unit, you may be liable to pay land tax. This includes property that does not earn any income.
Click here to view the Land Tax Guide 2007.
Risky Investments
It has now been reported that property investment company, Australian Capital Reserve (ACR), has collapsed, putting at risk investments valued at more than $300 million.
Perennial late night television advertiser ACR, which offered aggressive rates of returns on investments, raised funds directly from mainly elderly investors in a series of unsecured loan notes.
ACR, one of 26 companies in the Estate Property Group stable, then lent the money back to other companies within the group to invest in property developments.
This is the third property investment company to fail in just over a year.
Westpoint was wound up by the Federal Court in February 2006 and Fincorp collapsed in March 2007.
These types of Mezzaine funding investments are high risk and require proper research before investments can be placed.
At Macquarie Partners we use a highly reputed research company to assist us to rate investments before we recommend them to our clients. Accordingly none of the above investments were on our approved products list and none were recommended by us.
If you would like to discuss this matter or require financial advice on any other matter, please contact Vishnu Naidu on 02-8853 2694 or alternatively your usual contact at Macquarie Partners.
NSW: State Budget 2007-2008
The NSW Treasurer has released the NSW State Budget for 2007- 2008. The following measures may be of particular interest:
• Mortgage duty on the purchase of owner-occupied residences will be abolished from 1 September 2007.
• Mortgage duty on the purchase of residential investment property will be abolished from 1 July 2008 and on commercial property from 1 July 2009.
• The land tax rate will be cut from 1.7 per cent to 1.6 per cent for the 2008 land tax year; and
• Stamp duty on the hire of goods will be abolished from 1 July 2007 and on leases from 1 January 2008.
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Tax Planning with Pensions
As from 1 July 2007 the tax rate of 15% applies to personal taxable incomes between $6,000 and $30,000 per annum. There were also significant changes to the taxation of pensions from Superannuation Funds.
For clients who turn 55 they should now consider a transition to retirement pension from their superannuation fund. Please keep your eye out for a Macquarie Partners Special Alert on the topic of Transition to Retirement Allocated Pensions (TRAP).
Benefits for small business take effect from 1 July 2007
From 1 July 2007 it will be easier for small businesses to manage their tax obligations due to changes to GST registration thresholds. Entities with GST obligations will also benefit from other important changes to reporting and paying GST.
Most small business in Australia with an annual turnover of less than $2 million will benefit from changes to eligibility rules and greater choice that take effect from 1 July 2007.
More information outlining the small business concessions and GST changes is available on our
Small business concessions essentials web page.
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