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Property and Construction

Property and Taxes - GST Lessons for all Property Transactions

Over the years, several goods and services tax (GST) disputes have been brought before the Courts and they continue to this day. Some disputes involve the Commissioner, but many involve the parties to the transaction. 

Disputes involving the Commissioner generally involve the question of whether GST is payable or whether the margin scheme can apply. Disputes involving the parties to the transaction generally do not involve the question of whether GST is payable, but rather as to who is to bear the ultimate liability for GST.

Property and Taxes: vacant land deductions - ATO releases new ruling

The Australian Taxation Office (ATO) has released draft taxation ruling TR 2021/D5 which considers the ATO’s view on non-deductible expenses associated with vacant land. From 1 July 2019, certain taxpayers are denied a tax deduction for outgoings in relation to vacant land unless the land is used in a business, or another exclusion applies. Deductions which are denied by the operation of these provisions include interest expenses, council rates, land taxes and maintenance costs. Importantly, certain entities are not impacted by these provisions including (but not being limited to) companies and managed investment trusts.
 

Property and Taxes - managed investment trusts

Managed Investment Trusts are registered schemes established and managed by sophisticated Trustees holding an Australian Financial Services License. They enable investors to pool capital to collectively acquire large scale commercial, retail and industrial properties. Operations are typically limited to passive investment income (leasing). Entities are typically set up as up as unit trusts which provides investors with clearly defined rights to income and capital, yet retaining access to Capital Gains Tax (CGT) concessions.
 

Property and Taxes - Commercial property considerations (Part 1)

Beyond its immediate impact, the COVID-19 pandemic also shook up the commercial real estate market. The long-term ramifications of this will be felt for a while. For example, with many employers incorporating flexible work from home policies, there has been a substantial shift in how businesses factor in the importance of and need for spacious offices. In addition to the impact the pandemic has had on the commercial office sector, a substantial impact can also be seen on the retail sector with the increasing number of vacancies in retail spaces over the last 12 months. With all these long-term issues engulfing the property market, owners of commercial properties will be considering offering generous lease incentives to attract prospective tenants.
 

Claiming depreciation on investment property

Rental property investors have access to a range of tax strategies. One such strategy, which is often underutilised, is claiming depreciation as a tax deduction.

Property expenses, such as depreciation and capital works expenditure, can be deducted over a number years, adding to a significant return for property investors come tax time.