Tax matters for property investors in a time of crisis | ATO Assistant Commissioner Adam O’Grady

Recently, I appeared on the Australian Taxation Office’s podcast, Tax InVoice, to talk about tax-related matters that would be of interest to property investors in a time of crisis.

I spoke with assistant commissioner Adam O’Grady about how the events of 2020 impacted property investors and what recent law changes mean for residential property investors.

Some of the things we covered included what can and what can’t be claimed, how to avoid some of the common tax mistakes, and where to find further information.

This was an informative discussion, one that I think listeners of my podcast will find relevant and useful, so I’m going to share that episode with you today. Subjects I discuss with Adam O’Grady

Landlords can continue to claim their deductions and interest, even if their tenants currently can’t pay rent due to COVID-19

• How interest is being accrued on bank loans, even though the bank isn’t charging interest right now
• The tax implications of using your rental property yourself, even when you can’t rent it out
• If the surge in available rental markets affects what you can claim
• How recent tax law changes affect investors who are foreign residents for tax purposes
• Changes to the tax deductibility of holding vacant land
• Avoiding mistakes in apportioning expenses and income if you co-owned a property
• Misconceptions about when you can claim renovation work to your investment property
• The difference between a repair and a capital improvement
• How investors can use the Government’s Renovations Grant to improve their property, and what they can claim from that
• Differentiating between what’s deductible and what isn’t
• Keeping records that provide evidence of income
• The elimination of travel expenses to inspect your property or collect rent as a claimable expense

Links and Resources:

Find this episode on the ATO website

Shownotes plus more here: Tax matters for property investors in a time of crisis | ATO Assistant Commissioner Adam O’Grady

Some of our favourite quotes from the show:

“There’s some changes to the legislation, there’s issues with COVID, there’s been floods and bushfires, we’ve had a challenging year.” – Michael Yardney

“As we said there’s fewer tourists for the short term rental market, there’s fewer international students coming, and currently people are just a bit more nervous about moving anyway, so a lot of people are going to have longer vacancies or are going to have to drop their rent.” – Michael Yardney

“I’ve seen many people buy a property, it’s a bit rundown, so they go ahead and they do a renovation to make it more attractive to tenants, to get more rent, so they’re doing it for good, legitimate reasons, but then they think the repair can be claimed as a repair in that tax year.” – Michael Yardney

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