Maria Milillo, Business Support & Development Manager (Property Management) Raine & Horne Group, answers questions to guide investors approaching the end of the year.
Q1: What are some valuable investment property apps?
This is a great question, and there are four property apps that I would urge investors to review next time you visit the app store.
1. Property Calculator Australia
This app is free and is available for iOS and Android devices, and it demonstrates what it will cost to buy a property, including mortgage repayment estimates, stamp duty and lenders mortgage insurance (LMI). The size of your deposit is the starting point for these calculations, and it also allows you to adjust the interest rate and customise your loan term. The app also provides for principal-and-interest or interest-only repayments. Every prediction can be saved enabling you to compare the results with other properties that you’ve put under the microscope.
2. CommBank Property
Another free app, the CommBank Property app is iOS and Android compatible. Powered by Domain, it has a user-friendly property search function which also allows you to view properties currently for sale and previously sold properties.
The CommBank app offers three calculators labelled “What would my repayments be”; “How much can I borrow”; and “What would my upfront costs be.” The app also allows you to search suburb profiles and offers information such as median house prices, 12-month growth values, median weekly rents, annual rental yields and much more.
Once again Evernote can be accessed free of charge and is compatible with iOS and Android devices.
During property searches using Evernote, it’s easy to forget the specifics of every property you’ve inspected. That’s until now. Evernote enables investors to make notes about a house or apartment using voice to text or their keyboard. The app also lets you attach a photo and hyperlinks to the note for later reference. Evernote is a valuable place to store documents relating to your property such as manuals, appliance serial numbers, tenancy agreements and so on.
4. BMT Tax Calculator
BMT Tax Depreciation offers a free, iOS and Android app, and is a must for investors, eager to maximise the tax benefits of owning a rental property. Moreover, with the Federal Government making some significant changes via the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017, it’s more critical than ever to understand the depreciation benefits you can claim from a property investment.
Please note that this app uses estimates only to provide a guide to the depreciation write-offs you can claim. However, it does allow you to enter relevant statistics such as the property’s construction date, its condition, and size. With this information, the BMT app can provide a schedule of rates based on the minimum and the maximum estimated depreciation allowances. The BMT app also takes into consideration your marginal tax rate and projects the depreciation over a 5-year period.
Q2: How has depreciation changed with the passing into law of the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017?
It’s a mouthful. However, the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 will impact the travel expenses investors currently claim, as well as plant and equipment deprecation.
Under the new law, which passed on 15 November, individual investors will be unable to claim the costs involved in visiting an investment property as a deduction. At the same time, investors will be unable to claim the depreciation of plant and equipment in an established apartment or house purchased after 7.30 pm on 9 May 2017. Moreover, these amendments come into effect retrospectively from 1 July 2017. Meanwhile, the depreciation of any new improvements you make to an established property you acquire after 9 May can still be claimed as before.
For investors who purchased established properties before 7.30 pm on 9 May 2017, there will be no change to the way you currently claim plant and equipment depreciation.
The amendment is a significant change to the tax laws relating to the depreciation of a residential property. However, it is not the end of the road for residential real estate as a tax-effective investment class. There are still thousands of dollars that can be claimed by investors. The changes mean that investors need an up-to-date depreciation schedule to ensure no claims are missed. If you don’t have a depreciation schedule, or feel you need a revision in light of the new amendments, be sure to talk to your accountant or a quantity surveying specialist such as BMT Tax Depreciation.