AUSTRALIANS Love Property

Not only do we have one of the highest home ownership rates in the world but we also have one of the highest investment rates in the world.

Last year, more than 1.4 million people claimed rental deductions against their tax returns, and 200,000 firsttime property investors are expected to swell that number to 1.6 million this year.

While negative gearing, claiming your losses and cutting your costs are all allowed under our tax system, there are still a high number of mistakes made every year when it comes to property returns. The Australian Taxation Office says more than $25 billion was claimed in deductions on rental properties last year, making real estate one of the largest sources of claims.

Frank Brass, a director of tax company H&R Block, says one of the biggest expenses and often the area where the most mistakes are made is claiming interest paid on borrowings. “If you use some of the money for private expenses, then the interest amount has to be worked out pro-rata – a very expensive process to get your tax agent to do,” he says.

http://www.news.com.au/business/money/story/0,25197,25806877-14327,00.html

Martin comments – I have learnt over the past few years that having a great property is only part of a successful investment. We have seen many people with good properties “in trouble” because they did not set up their accounts and loans properly. Mixing private and investment expenses on the same account , as mentioned above, is one of the common mistakes made. As experienced investors we can show you how we manage those issues for ourselves.