The main residence exemption exempts your family home from capital gains tax (CGT) when you dispose of it. But, like all things involving tax, it’s never that simple.
in News
The Government is introducing laws that will require employers to pay SG at the same, or similar time, as they pay employee salary and wages. The logic is that by increasing the frequency of SG contributions, employees will be around 1.5% better off by retirement, and there will be less opportunity for an SG liability to build up where the employer misses a deadline.
Originally announced in the 2023-24 Federal Budget, Treasury has released a consultation paper to start the process of making payday super a reality. The reforms are scheduled to take effect from 1 July 2026.
What is Payday Super?
in News
Want to buy a holiday home and claim it on tax?
It’s not as simple as it sounds…
Find out what the ATO requirements are before you start.
- The only Expenses that can be deducted are those incurred in earning Rental Income, so nothing can be claimed that is incurred before the first rental income. Any repairs, refurbishment that you do to the property before it is first rented are considered by the ATO as
The ATO estimates that incorrect reporting of rental property income and expenses is costing around $1 billion each year in forgone tax revenue. A big part of the problem is how taxpayers are claiming interest on their investment property loans.
There is an uptake in ATO activity focusing on refinanced or redrawn loans. This activity is a result of a major data matching program of residential property loan data from financial institutions from 2021-22 to 2025-26. This data is being matched to what taxpayers have claimed on their tax returns. Those with anomalies can expect contact from the ATO to explain the discrepancy.
If you have an investment property loan and redraw on the loan for a different purpose to the original borrowing, the loan account becomes a mixed purpose account. Interest accruing on mixed purpose accounts need to be apportioned between each of the different purposes the money was used for.
On the other hand, if the redrawn funds are used to produce investment income, then the interest on this portion of the loan should be deductible.
For example, if you have redrawn on the loan to pay for a private holiday, or pay down personal debt, then the interest relating to this portion of the loan balance is not deductible. Not only will the interest expenses need to be apportioned into deductible and non-deductible parts, but repayments will normally need to be apportioned too.
Withdrawals from an offset account are treated as savings rather than a new borrowing. If you have a loan account and an interest offset account is attached to this account that reduces the interest payable on the loan, withdrawing funds from the offset account will typically increase the amount of interest accruing on the loan, but won’t change the deductible percentage of the interest expenses. That is, when you withdraw funds from the offset account this is really a withdrawal of savings and won’t impact on the extent to which interest accruing on the loan account is deductible.
If you have a home loan that was used to acquire your private home and you have funds sitting in an offset account, withdrawing those funds to pay the deposit on a rental property won’t enable you to claim any of the interest accruing on the home loan. However, if you redraw funds from the home loan to acquire a rental property then interest accruing on this portion of the loan should be deductible. The tax treatment always depends on how the arrangement is structured.
in News
Business owners can be so occupied with running their business and hiring staff and most often miss out important thresholds that they need to be aware of.
In the past we have seen businesses missing the threshold to register for WA Payroll Tax simply because they do not realise that it is their responsibility as an employer to ensure they register, lodge and pay Payroll Tax on time.
In recent years WA Payroll Tax has become more complicated as there were several changes made to various thresholds and tiers as well as the tax rates.
