Tax time starts a little less than a month from now – but property investors should start preparing as soon as they can, as they face greater scrutiny by the Australian Tax Office.
The Reserve Bank met in the first week of the month, and official rates are currently sitting at 1.50 per cent. Debt Markets anticipate rates will stay on hold over the next 12 months.
In this month’s newsletter, I offer some tips for property investors to get their tax in order. We’ll also look at the Danish concept of ‘Hygge’ and how it’s the perfect way to get cosy this winter.
Take advantage of existing low rates before they hike up again. I can lay all your options out on the table so that you can make the most informed decision for your unique circumstances. Call today.
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How property investors can get greater tax returns
With tax time looming, there are a few things property investors should be considering, particularly with the ATO singling out rental property owners this fiscal year.
Landlords can sail through tax time relatively stress-free, as long as they’re making sure they get the basics right. Here are 3 key things to look out for:
1. Claim your expenses correctly.
Tax deductions for travel-related expenses are now banned, to stop landlords claiming for personal stays in their holiday homes. However, there are still many legitimate expenses you might be under-claiming, including body corporate fees on strata or community-titled properties and offsetting some of the costs of your home office if you’re a self-managed landlord.
2. Holiday home deductions.
Approximately 350,000 of Australia’s 2 million property investors own homes in holiday destinations. If you’re one of them, remember you can’t claim for any days you, your family or friends use for personal holidays. Make sure you keep a record of when your holiday home is rented, vacant and used for personal holidays to avoid any confusion.
3. Claim your insurance premiums.
The landlord insurance policy on your rental property is tax deductible expense. Tax time is also a great reminder to review your policy, make sure it covers you for all the risks associated with your investment and is giving you the best deal available.
Want to find out what the new rules for investor lending mean for your mortgage? Call me to talk through all the fine details you need to know now.
Are you feeling Hygge yet?
Hygge (pronounced hue-guh) is a Danish word for feeling cosy, charming or special – and it’s being bandied around a lot when it comes to interior design.
According to the latest reports, the Danes are among the happiest people on earth, which is hard to understand when you realise the country is subject to freezing cold temperatures, a limited amount of daylight and paying one of the highest tax rates in the world.
Hygge may have something to do with – it's a keen appreciation of the present, of finding moments to celebrate regardless of the cold, dark sameness of winter.
Hygge is all about creating simple rituals that raise daily life to an art form – like brewing real tea with a little china cup or purchasing fresh flowers at the same time each week. It's a heartwarming way to live a life filled with love, happiness, well-being, simplicity, laughter – a cosiness for the soul.
And even though our Australian winters don’t leave us with the kind of dreaded boredom and sameness of a Northern European winter, incorporating elements of Hygge into our homes is a lovely way to wait out the colder months. Turning your house into a sanctuary that encourages social interaction, comfort and cosiness are all vital starting points. Here are a few ways to do it:
1. Keep it simple. Hygge-style colour schemes are pure, simple and natural to evoke feelings of tranquillity. The overall aesthetic should keep to a tight colour palette that is understated, soft and subtle – think monochromatic with muted accent tones like dusty blues or pale pinks rather than bold colours.
2. Add texture. A Hygge living room should feel warm and inviting. Begin by layering lots of tactile textures and adding soft mood lighting. Introduce some chunky knit cushions, throw and wool rugs for a soft, snuggly place to land or layer up with a sheepskin or reindeer hide for an extra layer of warmth.
3. Embrace slow. A Hygge life is often centred around the table sharing good food and great company. In a Danish home, it’s not unusual for a whole day to be spent leisurely planning a meal, preparing it and then sitting down for hours to chat, giggle, drink and dine. It’s about creating a strong sense of ‘togetherness’ and sharing equally.
Want to add some Hygge to your life with a little renovation money? Let’s discuss what equity you have in your home to draw on. Call today.
