Whose name should the property be in?

It depends on current and future income of each owner and whether the property will be negatively or positively geared. Negative gearing favours the higher earner, while positive gearing or a future capital gain often favours the lower. Land tax and asset protection also matter. Decide before purchase, as changing ownership later generally triggers stamp duty and CGT.

Is the new kitchen deductible?

Generally not immediately. Replacing an entire kitchen is a capital improvement deducted over time as capital works. Repairing the existing kitchen, such as fixing a cupboard door or replacing a broken appliance like for like, is usually deductible immediately.

Home/Services/Investment property tax

Investment property tax done right

Property is where the gap between an average return and a good one is widest — because so much of the benefit sits in deductions people never claim and structures chosen before anyone did the maths.

Rental schedules look simple. The complexity is in the detail: whether that $4,000 of work was a repair you can deduct now or a capital improvement you cannot, what depreciation the property is genuinely entitled to, how borrowing costs are apportioned, and whether the property is even in the right name.

We handle everything from a single unit to a growing portfolio — a Spectrum specialty across the Hills District, where a lot of clients hold one or two properties alongside a salary or a business. The property is often the largest single variable in the return, and the one most sensitive to getting the treatment right.

Ownership structure is the decision that matters most and gets the least attention. Once a property is bought, changing whose name it is in usually triggers stamp duty and capital gains tax. That makes the conversation before you buy far more valuable than the one after.

Full depreciation review, Division 40 and Division 43
Repairs versus capital improvements, correctly split
Negative and positive gearing handled properly
Ownership structuring advice before you buy
CGT planning ahead of any sale

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What’s included

Where the value actually is

Depreciation

Capital works at 2.5% a year over forty years under Division 43, plus plant and equipment under Division 40. If you do not have a quantity surveyor’s schedule and the property qualifies, that is usually the single biggest missed deduction.

Repairs versus improvements

A repair restores something to its original condition and is deductible now. An improvement makes it better than it was and is capital. Getting this line wrong is the most common error we correct.

Interest and borrowing costs

Interest apportioned correctly where a loan is partly private, redraws treated properly, and borrowing costs such as establishment fees and mortgage insurance written off over five years.

Ownership structure

Sole name, joint, tenants in common in unequal shares, or through a trust or company — each with different consequences for negative gearing, land tax and eventual CGT.

Capital gains tax

The 50% discount for assets held more than twelve months, cost base including acquisition and improvement costs, main residence exemption issues and the six-year absence rule.

Portfolio strategy

How multiple properties interact with each other, with land tax thresholds and with your overall income position — rather than treating each one in isolation.

How it works

How we handle your property

Step 1

Review the property

Purchase details, loan structure, ownership and what work has been done since acquisition.

Step 2

Check the depreciation

Whether a quantity surveyor’s schedule exists, whether the property qualifies for one, and whether it is being applied correctly.

Step 3

Prepare the schedule

Income, interest, expenses and depreciation built into your return with each item classified defensibly.

Step 4

Plan the next move

Whether to hold, sell or buy again — and what each does to your tax position before you commit.

$110 per property, added to your return

An investment property schedule is $110 including GST per property, added to a standard individual return of $220. Ownership structuring advice ahead of a purchase, or CGT planning before a sale, is best handled in a $220 tax planning session where we can model the alternatives properly.

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FAQ

Investment property questions

If the property was built after September 1987, or has had significant renovation, almost certainly yes — a quantity surveyor’s report typically costs several hundred dollars and usually returns multiples of that in the first year alone. Note that since 9 May 2017, second-hand plant and equipment cannot be depreciated on established residential properties, though capital works deductions continue to apply.

It depends on who earns what now, who will earn what later, and whether the property will be negatively or positively geared. Negative gearing favours the higher earner; a positively geared property or a future capital gain often favours the lower. Land tax and asset protection also matter. Decide before you buy — changing it afterwards generally triggers stamp duty and CGT.

Generally not immediately. Replacing an entire kitchen is a capital improvement, deducted over time as capital works rather than claimed in the year you paid for it. Repairing the existing kitchen — fixing a cupboard door, replacing a broken appliance like for like — is usually deductible straight away. The distinction is worth getting right in both directions.

You pay capital gains tax on the profit, added to your income in the year of sale. If you held the property more than twelve months you generally get the 50% discount as an individual. The cost base includes purchase price, stamp duty, legal fees and capital improvements — and depreciation you claimed reduces it. Timing the sale across a 30 June boundary, or into a lower-income year, can change the bill substantially.

Related services

Individual tax returns Tax planning SMSF accounting Full fee schedule

Buying, holding or selling?

Each one has a different right answer. Talk to us before you act — that is when the advice is worth the most.

Book an appointment Call 0413 115 225