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.

We have had a number of enquires recently about how the “principal residence” exemption for land tax applies when you are away from home on 30 June (the date land tax is assessed in Western Australia), and you have rented out the home in your absence.
 

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.
 

Whether it’s after being left a property, buying a new block of land, or realising that you’d be better off selling some of the acreage attached to your home, many people around Australia may at some point find themselves embarking on an exercise to leverage their real estate to its best advantage.
 

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.
 

Self-managed superannuation funds are commonly used to purchase property. The superannuation environment provides a concessional tax environment on earnings and capital gains, so many find it attractive to invest in a specific property using their accumulated superannuation balance.

Following on from part 1 of our Property and Taxes – Commercial Property Considerations article, we will be exploring additional tax considerations for commercial properties. The tax rules surrounding commercial properties are quite complex and often not fully understood.  

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.
 

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.
 

Some of the simplest strategies to improve property value and tenant retention are found by unlocking the idling capacity in your existing assets, says Moore Stephen’s director Ross Sicuro.