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CREATING WEALTH AND LIFESTYLE THROUGH

Issue 23

by Grant & Christina Penrose

Danger Alert, 16 Fatal Mistakes that Can Trigger a Tax Audit…

Renovating? Did You Know There’s an App for That?

July Capital City Home Values Increase for the Second Consecutive Month

Want to Let People from all Around the World have the Opportunity in 31 Languages to Buy Your Property?

Are you missing out on thousands of dollars? Claim Depreciation on an investment property.

PROFILE REAL ESTATE

Helping you understand Real Estate


A Whole Lot to Celebrate! Work has been getting busier and busier this month, with property sales continuing to be kind to us with our results already up 36% on last year. It was great to see we came in at Number 5 office again in Australia for the month of July and Grant ranked in the top 100 Agents (number 43) list for the first half of the year out of hundreds of agents across the country. Thanks to everyone who has supported us and made these results possible! Speaking of awe-inspiring feats... wasn’t it wonderful to see our elite Olympian athletes Grant and Alexander leading the kids’ excelling in their fields, representing olympics parade our country? On a considerably more local level, Grant and Alexander led the parade for the kids’ Olympics here and it was wonderful watching the kids’ sports day much fun was had by all! Life continues to be busy not only with work but with kids’ activities, sports days and almost weekly birthday parties! The Cirque du Soleil was a highlight with Jade and Mum and Dad joining us. The Jade and Christina at Cirque du Soleil boys were glued to their seats and trampolining took on a whole new world of possibility! This year we added the Ekka to our list of outings much to the delight of the boys and, I’ll admit it, we had a ball too. Thankfully we arrived home without losing any of them, although we came close a few times! It was the boys’ first time at the Ekka and they loved it; there was so much for them to see and do. Highlights included: the animal nursery which was amazing and, of course, they had to try fairy floss, and strawberries and ice cream cones. When it came to the rides Alexander was too small, but naturally wanted to go with

his brothers and so good old Mum had to go with him! I think I was more scared than he was and we were on the little kids’ rides; even the Ferris Wheel was a worry! And talking about thrills (without the spills), we are also excited to announce the launch of all our properties on global.remax.com, the first truly global resource for consumers, with hundreds of thousands of home listings in countries around the world, giving you the opportunity to view them in any language you choose. The site features customised search tools that allow you to search for properties in 31 languages, translate currencies and find the latest international real estate news. Rental properties are currently taking a little longer to rent, with the average being 14 days for Brisbane, but the good news is we are still finding fantastic tenants for our landlords. Our passion for sales is spilling over into rentals these days; we are fully embracing all the new technologies available and adding old fashioned service to really excel with our management business to the extent that invitations are coming in from other business owners for us to share our expertise. It’s amazing how much we pick up when helping them out. Always improving is our motto! We really appreciate the referrals coming in for properties to sell and rent, and remain grateful and dedicated to giving you and your friends, family, neighbours and colleagues the best service possible. We hope you’re also having some fun and enjoying all the best that life can offer. Wishing you wealth, health and prosperity

Christina Penrose

The boys at the Ekka

In this edition ➣ Danger Alert, 16 Fatal Mistakes that Can Trigger a Tax Audit…

➣ Renovating? Did You Know There’s an App for That?

➣ July Capital City Home Values Increase for the Second Consecutive Month

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➣ Want to Let People from all Around the World have the Opportunity in 31 Languages to Buy Your Property?

➣ Save Tax $$$ By Learning the Difference Between Improvements vs. Maintenance…

➣ Are you missing out on thousands of dollars? Claim Depreciation on an investment property.

RE/MAX PROFILE REAL ESTATE creating wealth and lifestyle through property


Danger Alert, 16 Fatal Mistakes that Can Trigger a Tax Audit… Are you filing your tax return? Read on for 16 serious mistakes to avoid if you don’t want to trigger an ATO audit. • Estimating rather than getting the actual figures. • Claiming a deduction for interest on the private portion of the loan. The interest expense must be apportioned between the ‘deductible’ and the ‘private’ portion of the total borrowings. • When depreciating assets, new assets acquired for less than $1,000 during the year are allocated as ‘low cost assets’ to the pool but the decline in value for these assets in the first year is at a rate of 18.75%, or half the pool rate. Halving the rate recognises that assets may be allocated to the pool throughout the income year and eliminates the need to make separate calculations for each asset based on the date it was allocated to the pool. For subsequent years they are depreciated at the normal pool rate of 37.5%. • Claiming initial repairs or capital improvements as immediate deductions. Initial repairs to rectify damage, defects or deterioration that existed at the time of purchasing a property is generally capital and not deductible, even if you carried out these repairs to make the property suitable for renting. However, it may be claimed as capital works deductions over 40 years. • Not showing dividends from dividend reinvestment plans in your tax return. • Claiming a deduction for the cost of travel when the main purpose of the trip is to have a holiday and the inspection of the property is incidental to that. • Not having receipts to justify the deductions you are claiming, and you cannot justify the connection between the expense and deriving the income (eg, it was for a private purpose). • Omitting overseas income – taxpayers are subject to tax on their world-wide income and the ATO has agreements with over 42 countries with data-sharing. • Claiming deductions for a rental property that is not genuinely available for rent, ie, a holiday house. • Incorrectly claiming deductions for a property that is only available for rent for part of a year. • Incorrectly claiming deductions for a rental property when it has been used by relatives or friends free of charge for the part of the year. A deduction is not allowable for the periods involving that free occupancy. • Incorrectly claiming for the cost of land in a claim for capital works. Only the original cost of construction is included in the calculation and the cost of the land forms part of the cost base when calculating a capital gain or loss. • Incorrectly claiming deductions on depreciating assets that are only eligible for a capital works deduction. • Incorrectly claiming a deduction for conveyancing costs when they should form part of the cost for capital gains tax purposes. • Incorrectly claiming all deductible borrowing expenses greater than $100 in the first year they are incurred instead of spreading over five years or over the term of the loan, whichever is less. • Not splitting the income and expenses in line with their legal interest in a property where purchased by a husband and wife as co-owners. Source : Your Investment Property (12 July 2012)

Materials and articles in this publication are general comment, not advice. The information is believed to be accurate and reliable but no responsibility is taken for any opinions expressed or for errors or omissions. Readers should not act on the basis of the material without taking professional advice relating to their particular circumstances.

Grant & Christina Penrose www.propertysalesbrisbane.com

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Renovating? Did You Know There’s an App for That? With apps for almost everything, renovating has never been easier. Here are 10 of the best: Sun Seeker: 3D Augmented Reality Viewer ($5.49) As the cooler months roll on, it’s apparent that maximising sunlight can make or break the sale of your home. So if you’re planning to renovate for sale, it might be wise to plan your design in a way that maximises natural light. Now that smartphones have a compass function, apps such as Sun Seeker are able to overlay the camera with additional information, including the solar path of the sun. Since Dawson created the app, it has been downloaded almost 85,000 times.

MagicPlan (Free) Using the camera function, MagicPlan measures and draws your floor plan. Simply stand in the centre of a room, point your camera at all four corners and you’re done.

Home Design 3D ($8.49) Home Design 3D is a level up from MagicPlan. Relative to other apps, it may seem a little expensive but, in essence, it’s a slimmed-down version of PC software used by professional designers, which costs $43. You start by drawing up the rooms of your house before adding various items of furniture. You then hit the 3D button and you can fly through the property and view it from every angle. This allows you to work out what you like and, more importantly, what you might change. Give the free trial version a whirl and see what you think.

The Builder App (Free) You’ve drawn your concept, now it’s time to bring in the professionals. Specific to Australia, the Builder App puts renovators in contact with both tradies and suppliers. The coolest feature of this app is the “get quotes’’ function, which sends out a message to all the relevant tradies and suppliers within 25 kilometres, who then contact you with a quote.

Handy Man DIY ($1.99) If you’re a bit of a renegade and want to save money by doing the smaller jobs yourself, here’s the app for you. Handy Man DIY provides step-by-step videos and instructions for simple renovation tasks. It also has features for storing information about your rooms and costs.

iHandy Carpenter ($1.99) This is a virtual tool kit for “hands-on’’ renovators. It comprises the five most common tools used by carpenters - a plumb bob, surface level, bubble level bar, steel protractor and steel ruler. Try before you buy - you can get the iHandy Level app free.

Houzz Interior Design Ideas (Free) This app is a great way to become inspired about both interior and exterior design. It features more than 500,000 photos of properties that you can browse by style, room and location. It may be time to retire your scissors because this app, in effect, does away with the tradition of creating scrapbooks from home magazines.

Dream Home ($0.99) Similar to Houzz, Dream Home is all about having a stickybeak at other people’s designer homes and pinching ideas. It’s the interactive element that differentiates this one - users submit their own interiors, others rate them, and those that rate well go in the “popular’’ section. A good way to tap into the design trends of tech-savvy home owners.

ColorChange ($2.99) So you’ve finished your house and you’re left with the allimportant decision of what colour to paint it. ColorChange allows you to take a picture of a wall and apply different colours to see what you like. The “magic’’ function cleverly excludes things such as doors and windows.

Dulux MyColour (Free) Find yourself in someone else’s house and want to copy the colour of their walls? Or did you glimpse the perfect shade of ethereal orange in the sky as the sun set at the end of an emotionally significant day and realise, “Hey, maybe I should paint my room that colour?’’ With Dulux MyColour, you simply snap a picture of something, tap the photo where you think the winning colour is, and the app will tell you the name of the paint that most closely matches that colour. The app is free, the Dulux paint isn’t. Source : www.domain.com.au (10 July 2012)

Want FREE “Do it yourself” instructions for showing off your home in a way buyers will fall in love with it and pay your dream price? Just visit and like our facebook page www.facebook.com/howtosellyourhomeforadreampriceinrecordtime or order a copy from our website

How to

sell

your home for a dream price in

record time!

Seduce your BUYER with the home of their dreams!

BY GRANT & CHRISTINA PENROSE

www.propertysalesbrisbane.com/our-book/

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RE/MAX PROFILE REAL ESTATE creating wealth and lifestyle through property

Materials and articles in this publication are general comment, not advice. The information is believed to be accurate and reliable but no responsibility is taken for any opinions expressed or for errors or omissions. Readers should not act on the basis of the material without taking professional advice relating to their particular circumstances.


July Capital City Home Values Increase for the Second Consecutive Month Dwelling values across capital cities recorded a second month of capital gains in July with dwelling values up by 0.6% over the month following a 1.0% rise in June. The RP Data-Rismark Home Value indices posted a second successive rise in capital city dwelling values over the month of July. Across the combined capital cities, dwelling values rose by 0.6 per cent over the month with the rises being relatively consistently over the first three weeks of July followed by a -0.2 per cent fall over the final week of the month. Over the three months to the end of July, capital city dwellings have posted an increase of 0.2 per cent. Dwelling values across the combined capital cities are now down only -0.6 per cent since the start of this year representing a rebound relative to this year’s low point on 30 May when values were 2.2 per cent below the calendar year starting level. According to RP Data’s research director Tim Lawless, the July results were heavily influenced by improving values across the most expensive capital city markets. "The July rise was not as broad-based as the June results, with the month-on-month increase primarily being associated with the Sydney and Melbourne markets where dwelling values rose 1.2 per cent and 1.4 per cent respectively. The July result, when viewed together with the positive June result, suggests housing markets may be starting to respond to lower mortgage rates, which according to the RBA’s latest Board meeting minutes are around 50 basis points below their 15-year average."

Rismark CEO Ben Skilbeck, added, "Among the capital cities there remains significant differences in performance. While both Sydney and Melbourne experienced gains over the month, Adelaide declined -2.5 per cent. On a year to date basis, Sydney values have risen 1.7 per cent while at the other end of the spectrum, Melbourne and Adelaide have experienced declines of -2.7 per cent". According to Tim Lawless, at the combined capital city level the July rise was fairly evenly dispersed between houses and units. "House values were up by 0.6 per cent over the month while unit values rose 0.7 per cent. Over the last 12 months it is clear that unit values have been the most resilient to value falls with the Home Value Index showing -1.6 per cent fall in unit values compared with a -2.6 per cent fall in house values." Rental rates are continuing to rise; across the capital cities weekly rents have risen by 3.3 per cent over the first seven months of the year. Increases in weekly rents have been recorded across all capital cities over the last seven months apart from Hobart and Adelaide. The largest rises in weekly rents over the year to date can be found in Perth (13.7%) and Darwin (5.4%). According to Mr Lawless, other indicators are also showing some further signs of improving conditions in the market. "Auction clearance rates were recorded at 56.6 per cent over the last week of July, the highest clearance rate since February last year. We are also seeing average selling time and vendor discounting both at healthier levels than what was recorded a year ago and effective supply levels have also seen some improvement from their highs of late last year." 1 August 2012

Source : RP Data

Want to Let People from all Around the World have the Opportunity in 31 Languages to Buy Your Property? In our multi-cultural nation 1 in 5 people living in Australia don’t speak English as their first language. The launch of all our property listings for sale and rent on the new global.remax.com.au, in whatever language you select, now makes it so much easier to purchase locally or internationally. The website features properties in more than 85 countries, in 31 currencies and languages, and is perfect for investors as the whole world has finally been opened up to choose from. All currencies are converted to your language of choice as well as full descriptions of the properties. Now, it couldn’t be easier to consider investment options anywhere in the world. If you would like your property exposed around the world and in 31 different languages, call us today! This is one of the many benefits of listing with RE/MAX. Nobody in the world sells more real estate than RE/MAX! Simply call us today and we will get your property exposed globally and sold or rented in record time.

www.facebook.com/GrantChristinaPenrose Grant & Christina Penrose www.propertysalesbrisbane.com

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Save Tax $$$ By Learning the Difference Between Improvements vs. Maintenance… Q: Can I claim a deduction for the new fence I just installed on my rental property? A: The answer is dependent on whether the new fence constitutes a repair or an improvement. Furthermore, if it meets the definition of a repair, was it in that condition at the time of purchase? What determines something as a repair rather than an improvement is a question of fact, determined by case law. However, in general terms, the following rules can be applied to assist you in your decision-making. Work carried out is more likely to be a repair if: • It relates directly to wear and tear. • It is a replacement or renewal of a worn out or broken part. • It restores something to its former condition and remains functionally the same. Work carried out that has the following characteristics may be classified as an improvement if: • It changes the character or functionality of the item. • It becomes a restoration of substantially the whole building in its entirety. An immediate deduction is available for work considered a repair, regardless of cost. However, an improvement or a repair to a condition that existed prior to purchase date is considered capital in nature and therefore not deductible. In some cases, a capital allowances deduction may be available in line with Division 40 of the Income Tax Assessment Act 1997 over the life of the asset. Applying these facts, if the fence in question is a result of work required to repair damage or wear and tear that has occurred since the property has been rented out, then a deduction will be granted in full. However, no outright deduction would be available if the new fence is: • Of a different material to the old one (and therefore resulting in a change in character and functionality). • An addition to the existing fence line. • A repair to a fence that was already damaged at sale date. You may be entitled to a deduction under the capital allowances provisions of Division 40 over a number of years. Finally, remember this information is general and does not take into account your circumstances. You should speak with an adviser to consider if it's suitable for you. Source : Australian Property Investor (April 2012)

ARE YOU A PROPERTY INVESTOR? Stay up to date with the latest opportunities, legislation and interesting articles for landlords on our facebook page www.facebook.com/propertyrentalsbrisbane 6

RE/MAX PROFILE REAL ESTATE creating wealth and lifestyle through property

Materials and articles in this publication are general comment, not advice. The information is believed to be accurate and reliable but no responsibility is taken for any opinions expressed or for errors or omissions. Readers should not act on the basis of the material without taking professional advice relating to their particular circumstances.


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Are you missing out on thousands of dollars? Claim Depreciation on an investment property. Over the next few months Australians who own an investment property will be visiting their accountant to complete their tax return. Of these investors, many are unaware of what they can claim when it comes to property depreciation. According to Bradley Beer of BMT Tax Depreciation, claiming depreciation is the key to increasing cash flow on a residential investment property. “Research shows that 80% of property investors are failing to take advantage of property depreciation and are missing out on thousands of dollars in their pockets,” said Bradley Beer, Director of BMT Tax Depreciation. “As a building gets older, items wear out – they depreciate. The Australian Taxation Office allows property owners to claim this depreciation as a deduction. Depreciation can be claimed by any property owner who obtains income from their property,” said Bradley. Property owners often make the assumption their property must be new in order to claim depreciation deductions. Despite this myth, property owners can claim irrespective of a property’s age as deductions relate not just to the building’s structure, but also on the fixtures and fittings within.

costing skills to estimate building costs for depreciation. Quantity surveyors are qualified under the tax ruling 97/25. They also gain access to the latest information through their affiliations with industry regulating bodies. BMT Tax Depreciation is accredited with the Australian Institute of Quantity Surveyors (AIQS), The Royal Institute of Chartered Surveyors (RICS) and The Auctioneers & Valuers Association of Australia (AVAA). Quantity surveyors also work regularly with property managers and accountants to maximise deductions available to property investors. “BMT Tax Depreciation completes reports for over 10,000 accountants each year. Our reports show an average of $5,000 to $10,000 as a first full year deduction for residential properties,” said Bradley. BMT Tax Depreciation also guarantees to double their fee worth in deductions in the first full financial year or will not charge for their services. Property owners who would like a free over the phone assessment of available deductions they can claim should contact BMT Tax Depreciation on 1300 728 726.

Fixtures and fittings such as carpets, stoves, blinds, hot water systems, light shades and heaters also attract deductions.

Article Provided by BMT Tax Depreciation.

Consulting a specialist quantity surveyor to prepare a depreciation report before lodging a tax return is recommended to investment property owners. Quantity surveyors are one of the few professionals recognised to have the appropriate construction

Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is a Director of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia wide service.

Materials and articles in this publication are general comment, not advice. The information is believed to be accurate and reliable but no responsibility is taken for any opinions expressed or for errors or omissions. Readers should not act on the basis of the material without taking professional advice relating to their particular circumstances.

Grant & Christina Penrose www.propertysalesbrisbane.com

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Selling? Order a Free Book Today.

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Call us or SMS “Free Book” with your name and address to 0418 747 997, or go to www.propertysalesbrisbane.com/our-book and we will rush you a copy.

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Seduce your BUYER with the home of their dreams !

BY GRA NT & CHR ISTINA PENROS E

EVIDENCE OF EXCELLENCE RECENTLY SOLD JU

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“We have bought and sold houses over many years. Grant Penrose from the very beginning kept us informed and gave us valuable information. The property had open for inspections and Grant handled each and every inspection with attention to detail, his customer service is outstanding.

Downs r, Bridgeman 9 Coolabah C

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Grant is a true professional in every way, took his time with us and never once did we feel pressured. Weekly updates were presented to us in a timely manner. We both thank Grant for his wonderful service, very much appreciated.” Jim and Sandra Ohmsen Sellers of 9 Coolabah Crescent, Bridgeman Downs

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- 4 bed - 2 dalee: $500pw 28 Trevi St, Jin

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PROFILE REAL ESTATE P: 07 3510 5256 M: 0418 747 997 E: grantpenrose@remax.com.au christinapenrose@remax.com.au A: PO Box 388, Paddington QLD 4064 W: www.propertysalesbrisbane.com 8

Materials and articles in this publication are general comment, not advice. The information is believed to be accurate and reliable but no responsibility is taken for any opinions expressed or for errors or omissions. Readers should not act on the basis of the material without taking professional advice relating to their particular circumstances.

(07) 3375 1868 www.LithoArt.com.au

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RE/MAX Profile Newsletter Issue 23