Paul Glossop: Well, welcome guys again to Pure Property Investment one on one. We’re here today with Jeremy Iannuzzelli who is a partner of Keshab Chartered Accountants. Today we wanting to speak more specifically about deductions. And specifically cash deductions and how they can work with regards to property investing in general.
So Jeremy if wouldn’t mind probably elaborating a little bit more about deductions and how they can work for property investors and things people really need to focus on when buying a property and also come tax time to make sure that they’re getting the most out of their property.
Jeremy Iannuzzelli: Fantastic. I suppose deductions 101 really comes back down to anything that is incurred for generating that rental income for the property and that would be your council, your interest, your strata and associated cost. We really need to look a little bit further into the property itself and look at associated deductions which are not direct but more so indirect. So, I suppose the biggest key stone that I speak with a lot of clients about is “Well, what indirect deductions can we claim which will help maximize our refund.” And that would include potentially any phone calls that you make. So always have my clients dialog or record any phone calls they make with the property manager, any trips they make to their property manager or to view the particular property. At the moment being 1st July 2017 have taken the travel deductions away but still never the less for the 30 June 2017 you need to make sure you record it.
I suppose moving forward we need to look at the indirect cost with associated with buying the property and they would maybe council rates, water rates or strata rates paid via the settlement. That is a way to maximize our refund especially when buying the particular property in the first year. And the last one is ensuring that we have all our depreciation schedules in place and we are amassing all the borrowing cost. And those borrowing cost include things like lenders mortgage insurance which is very often missed and settlement charges as well with the associated loan.
So maximizing your refund is all about understanding the availability of deductions that we have at hand, is there any home office expenses potentially that you’ve used to manage quite a large portfolio? So we really need to think outside of the square but then come back to what is associated with that particular investment property.
Paul Glossop: Fantastic mate. There a lot there that I think realistically was spoken about and there’s probably, quite literally what I see straight away is a laundry list of different things where the investors might forget. And the smallest amount when we talking about potentially one to or multiple properties in a portfolio might mean the difference of hundred if not thousands of dollars if you A: want to do you taxes yourself or B: potentially maybe skim over certain things that you know you incurred as an expense but you thought “Well, I just lump it.”
Well, ultimately the best person to talk to is a good financially and property focused accountant who’s going to be able to say “Well, realistically if you can claim it, you claim it” and your job obviously is to make sure people is aware of what can and what can’t be claimed rather than just thinking “Ahh, I don’t think it can or I think it can”. Make sure they specific and they document and that sounds like it’s key every year to make sure you’ve got a good running laundry list of a simple spreadsheet or potentially moving a lot of those expenses back to your property managers so they can keep account of and they can give you a nice PNL at the end of the year.
There’s a lot of different ways and different strategies which yourself as well as us give a lot of strategy and opportunities for people to maximize those deductions long term.
Guys, I hope you got a lot out of that. I know there’s a lot there that you probably couldn’t digest in a couple of minutes but if you want to chat any further, feel free to give Jeremy a call on the number at the bottom of the screen or ourselves. I hope you enjoyed that, we speak soon. Cheers!
