Claiming everything you’re entitled to always makes sense at tax time, and this financial year there’s an easy way to claim the cost of working from home during COVID-19.
Around 10.5 million Australians worked from home during the Coronavirus lockdown. If that sounds like you, the Tax Office offers a simple solution to claiming the cost of working from home during the pandemic.
It’s possible to claim 80 cents for each hour worked from home between 1 March and 30 June. All you need to do is keep timesheets. If you worked, say, eight hours a day, five days a week for 12 weeks between March and May, you can claim a tax break worth $384.
Investors – don’t overlook depreciation
Tim Brown, who heads up Raine & Horne's financial services division, Our Broker, says the end of the financial year often sees homeowners think about investing in a rental property. “Investors can often use home equity in lieu of a cash deposit, so it may be possible to get started as a landlord without eating significantly into cash savings,” explains Tim.
Investing in a newly built property can hold plenty of appeal. New buildings can come with higher depreciation entitlements as landlords are usually able to claim depreciation on plant and equipment such as floor coverings and appliances – something that can’t be claimed if you invest in an established property.
“It’s definitely worth speaking to a quantity surveyor to organise a formal depreciation schedule that sets out your full depreciation entitlement,” says Tim.
If you already own an investment property, it’s worth thinking carefully about any renovations you’re planning to complete before 30 June. The depreciation on different options can differ widely.
As a guide, $4,000 spent installing new carpet in a family room would fast-track depreciation deductions because the Tax Office says the effective life of carpet is ten years. Spending the same amount tiling the room would lead to lower annual deductions as the tiles would need to be written off over 40 years.
“The end of the financial year is also an ideal opportunity for investors to review their property loan. Interest rates are at record lows, and it may be possible to secure a more competitive rate,” adds Tim. “When it comes to completing your tax return this year, be sure you get it right by speaking with a tax professional,” advises Tim.
To talk to a finance specialist to review your real estate finances, call Our Broker today on (02) 8232 0227 or visit www.ourbroker.net.au/