Wow, hasn’t 2017 gone fast! We’d like to begin by thanking all of our wonderful clients for a great year. We hope you have a wonderful holiday spent with family and friends.
Rental Property Changes
Depreciation: With the coming of the 2017 Federal Budget there has been an expansive change in the way that Australian Property Investors can claim deductions for their properties.
As it was previously investors could purchase a property and in doing so would have bought a building and various separate items of ‘plant’. These items of plant are known as depreciating assets and could previously be used to claim a deduction on your tax returntothe amount of depreciation for the year.
However, new legislation that has come into effect as at 1 July 2017 has fundamentally changed this. Now these deductions can only be claimed on purchases (outlays) for items purchased by the current investor. In other words, subsequent owners of a property will be unable to claim deductions for plant and equipment purchased by past owners.
Fortunately, these changes only apply going forward. Any plant or equipment that was purchased before 9 May 2017 (or was contracted for by this date) will continue under the old depreciation system until the property is sold or the effective life of the investment has been reached.
Travel: Additionally, there has been increased scrutiny on the deduction of travel expenses for a residential rental property. This has resulted in new legislation which as of 1 July 2017 means that there can be no deduction for travel expenses to rental properties for the purpose of inspecting, maintaining, or collecting rent. However, expenses
relating to engaging third parties such as real estate agents for property management are unaffected by this new legislation.
ATO Data Matching Changes
You may have noticed over the past year a few changes around Camtech & Slater. You have probably found that we are asking for information you didn’t have to provide before. This is due to the ATO’s increased data matching systems. While it may be a pain to gather some information, it will benefit you in the long run.
Casual Employees may be entitled to super
Employing casual workers provides businesses with an increased level of flexibility. However, it's important to remember that casual employees may be entitled to super.
Here’s the basics:
- You may need to pay super guarantee (SG) regardless of whether your employee is full-time, part-time or casual.
- If you pay your employee $450 or more (before tax) in a calendar month, you have to pay SG on top of their wages.
- If your employee is under 18 they must also work for more than 30 hours per week to qualify for SG.
Super guarantee is currently calculated at 9.5% of a casual employee’s ordinary time earnings. This includes their wage plus any casual or shift loadings for ordinary hours of work. It also includes commissions and some allowances, but it doesn't include overtime payments.
Use the ATO’s SG eligibility tool to work out if your casual workers are eligible for super.