With property remaining a high-priced asset, it’s more important than ever for investors to ensure their property investments are a financial success.

The latest data demonstrates property’s popularity. One-in-five households (21%) owns a home in addition to their usual residence.

Maximising taxation benefits is one key element but the ATO recently found 9 out of 10 returns were incorrect, so it’s essential to check your paperwork as we approach the end of the financial year.

Get your structure right

As with any investment asset, ensuring the right ownership structure for a property asset is vital because it can make a big difference to your tax position each financial year.

It’s also sensible to check if you are using the right structure to help protect your investment from creditors, provide income in retirement, or cope with the unexpected death of a part-owner.

Managing the loan

Once you establish your investment loan, tax still remains a consideration. Any deductions you claim for your loan expenses must directly relate to earning assessable rental income.

In cases where money from the loan is used for both private and income-producing purposes (such as a property partly used for rental and partly as your home), you must split your claims into deductible and non-deductible amounts.

If you use the redraw facility on your home’s mortgage to fund an investment property, you won’t be able to claim the interest as a deduction if you subsequently use your family home as a rental. There are also capital gains tax (CGT) implications with this strategy.

Costs related to loan establishment fees cannot be claimed as a deduction upfront and must be spread over the term of the loan or a five-year period, whichever is shorter.

Rental deduction dangers

Although many investors focus on the tax deductions they can claim from a property asset, both rental income and deductions are key areas of ATO interest.

Detailed records are required to substantiate all claims and any rental income from ‑short-term arrangements and insurance payouts must be included in your return.

You also need to be careful not to overclaim. Many new investors make the mistake of claiming an immediate deduction for initial repairs after purchasing a property. Existing damage must be claimed over several years as a capital works deduction and is used when working out your capital gain or loss when selling.

Deductions such as advertising for tenants, professional property management, council rates, land tax and strata fees, building and landlord insurance, and pest control can only be claimed for time periods directly connected to earning income.

Depreciation or capital works?

Property investors are able to claim a wide range of deductions for expenses associated with maintaining and financing property assets, but care is needed.

Claims for depreciation of assets with a limited effective life (such as freestanding furniture, washing machines and TVs), can be made each year, but deductions for capital works must be spread over 40 years following construction. Capital works include improvements or alterations such as adding a driveway or altering the building.

Improvements such as renovating a bathroom, are a building cost and must be claimed at 2.5 per cent annually over 40 years from completion.

Check your CGT

When it comes time to sell your investment, an important consideration is capital gains tax (CGT). The key to making your investment tax-effective is to ensure you have identified all legitimate expenses contributing to the property’s cost base so you can correctly calculate the capital gain or loss.

The property’s cost base includes the price paid plus your buying and selling costs (such as stamp duty, legal fees and the agent’s commission). You are not permitted to include amounts already claimed as a deduction, including depreciation and capital works.

Any capital gain must be included in your tax return for the income year the property is sold, while capital losses can be carried forward and used in future years.

To ensure you are making the most of your investment assets, call our office today.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

Loud budgeting is a trend that may have started as a joke but is being embraced by those who want to share their financial goals and priorities and in doing so, also improve their chances of achieving them.

It was comedian and writer Lukas Battle who brought the term “loud budgeting” to the world in a TikTok post, presenting it as an alternative to “quiet luxury” as loud budgeting represents a move away from spending to impress or conform.

As is the way with trends, the idea resonated with people, was picked up and run with by a growing group of budgeters. The spirit of the trend is about saying a loud “no” to what doesn’t align with your values. But there’s more to it than that, and there is also a right way to go about loud budgeting that will enable you to keep your finances on target – and your friendships intact.

The benefits of loud budgeting

But before we look at how to get it right, let’s explore why loud budgeting can be such a powerful tool to put you in control of your financial journey.

The fundamental reason it works is because talking transparently about your finances and sharing your reasoning behind how you want to spend your money gives you power and lets you decline invites in a way that is less likely to offend others.

Being open about your challenges can create a sense of community and inclusion. By sharing and acknowledging that it is normal to have limited spending capacity and that it can be a juggle to manage our short-term spending with our long-term savings goals, helps everyone understand each other’s pressures.

Once things are out in the open you are also more accountable. When you have shared your financial hopes and dreams with others, you are more likely to do what is required to stay on track and get support from those who care about you.

Making it loud – and successful!

Think of your goals

Before you start sharing your financial goals with others you must be clear on what they are. Think about what is important to you and what you are working towards. Don’t just have figures in your head – do a proper budget of what you have coming in, what you need to save to meet your targets and what you have left over to spend, so you can make educated decisions.

What matters to you

When you have decisions to make about how to spend your money it can help to think about what is important to you and make intentional choices. That ensures you are not living unnecessarily frugally, but being selective about what you choose to spend your money on, taking into consideration what matters most to you.

Eye on the prize

It’s important to keep your eye on the prize (or prizes) whatever form they may take. Looking to the longer term, this can be smaller goals, like saving up for a special occasion or bigger ones, such as a home deposit. It could also be prioritising payments such as mortgages, student loans and other kinds of debt. Check in from time to time to track your spending and savings against your goals.

Careful communication

Being careful in your phrasing will help make sure feelings aren’t hurt when you decline an invitation. Part of loud budgeting is not saying ‘no’ outright – it’s about explaining what’s going on for you and offering an alternative that works for you. For example, if you’re invited out for a dinner that you know will blow the budget, you could say “I’m trying to get enough together for a deposit to buy a place so I’m on a tight budget at the moment, can we catch up for a BYO barbeque at my place instead?

Making financial choices that are in line with how you want to live your life and prioritising long-term goals over temporary indulgences is a great way to set yourself up for a fantastic future. So why not speak up and try making your budgeting loud?

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

We all love a holiday. Having a break from the daily grind is the best way to refresh, re-energise and refocus but it’s not always possible to take off for a long holiday, which is where the newest vacation trend – microcations – comes in handy.

The microcation squeezes all the benefits of a vacation into a short break and addresses all the reasons you might not have managed to have time away for a while. Personal commitments, pressures at work and financial constraints all can get in the way of taking a vacation so taking off for a short, mini break is easy to organise and can be easier on the bank balance.

The benefits of a microcation

Whether you’d like to tear yourselves away from the routine of daily life and have some excitement, or just leave the stress of life behind for some much-needed R&R, the microcation offers all the benefit of a longer holiday in a small package.

Short breaks of under four days achieve restorative benefits on par with longer vacations and are even better for your thinking patterns and mental health than a longer break. The benefits of a tiny vacation also extend way past your return home, as a study conducted by the University of South Australia demonstrated. Participants wore fitness trackers that showed improved health and sleep patterns for as long as two weeks after taking a long weekend consisting of three days on holiday.

Microcation – macro easy!

If the thought of planning a lengthy vacation makes your stress levels rise, think of how comparatively easy it is to plan a micro vacation. It’s much easier to be spontaneous when you are only heading off for a few days. You can make the most of last-minute special offers for accommodation or airfares, or even just hop in the car and see where you end up. And you don’t have to worry about luggage allowances or excess baggage!

Does not need to break the bank (or the budget)

A tiny break is a LOT cheaper than a lengthy holiday just because of the short duration but there are also a lot of ways to keep a lid on expenses when you are away for a small amount of time.

Check out special midweek offers or look at house sitting or pet sitting opportunities in the area you are thinking of visiting. You might get to stay somewhere stunning for a few days – with some fur babies to spend time with.

Making it a social trip can also make for a lovely time away – and cost savings. You could think about visiting friends who live somewhere nice or getting together with a group to rent a lovely house in a great spot.

Planning a road trip can be simpler if it’s just for a brief time. You could even try camping to get off the beaten track and go exploring.

Just think about how many of your holiday highlights have been those unplanned magic moments that only happen when you let go and be open to new experiences. So just clear your schedule for a few days and let the fun begin! You don’t even have to have a trip away to enjoy a short break. Just taking a break from routine and exploring what your local neighbourhood has to offer can lead to amazing experiences.

Making the best of a short break

It’s important to make the best of a microcation from the get-go as you don’t have the luxury of a week or so getting into “holiday mode.” Try to choose an environment that allows you to feel removed from your regular routine and responsibilities and detach from work as fully as possible.

There are no limits to how short a microcation has to be, so you could even do something nice on a weekend, in your lunchbreak or after work – anything that makes you happy, relaxed and gets you out of your regular routine will give you all the benefits of a microcation and leave you refreshed and ready to live your best life when you’re not on holiday!

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

Stay up to date with what’s happened in markets and the Australian economy over the past month.

The run of stronger-than-expected domestic inflation figures continued in May.

The higher-than-expected inflation figures saw Australian shares tumble after reaching a welcome high mid-month.

The ASX200 finished the month on a positive note, slightly higher for the month of May.

Click the video below to view our update.

Please get in touch if you’d like assistance with your personal financial situation.

Click here for our June update video.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

As the financial year draws to a close, it’s the perfect time to review your financial affairs and set the stage for a successful new financial year. By taking care of essential tasks and implementing strategic planning, you can position yourself for a smooth transition and a strong start for the year to come.

Topping up super

One important item for the To Do list is to top up your super with either concessional (pre-tax) or non-concessional (post-tax) contributions. For example, you could make a voluntary concessional contribution up to the limit allowed and then claim a tax deduction on your personal assessable income for it.

Consider making additional contributions to your own super account or your spouse’s account, to take advantage of tax concessions.

If you have unused concessional cap amounts from the previous five years and a super balance less than $500,000 on June 30 the previous year, you may be eligible to make a catch-up (or carry-forward) contribution greater than the annual limit.

Maximising contributions not only helps you build your retirement savings but can also provide valuable tax benefits. But it’s critical to be mindful of your caps and to ensure that you make any super contributions before the end of the financial year to meet the deadline.

Reviewing investments

Reviewing your investment portfolio is a valuable task at any time but particularly now.

For example, you could take a look for any capital gains or losses that could be used strategically to manage your tax liability.

Also, it is worth considering how your portfolio performed over the past 12 months against your goal of capital growth, income, or balance.

You may decide to readjust your goals or your investments to help steer performance in the right direction for the next 12 months.

Of course, if you’re planning any changes, it’s important to check in with us to ensure you’re making informed decisions about your investments.

Paying expenses early

Another useful strategy at tax time can be to bring forward any deductible expenses or interest payments before 30 June to reduce your taxable income.

That could include incurring expenses on an investment property, prepaying interest on investment loans, making charitable donations, or claiming eligible work-related expenses.

Make sure you keep detailed records and receipts to support your deductions.

The ATO’s myDeductions app is a great place to start for free record keeping and to assist you to be ready for tax time.

Setting up salary sacrifice

As you look ahead to the new financial year, consider whether a salary sacrifice arrangement might be right for you.

Salary sacrifice allows you to divert a portion of your pre-tax salary directly into your superannuation, effectively reducing your taxable income and boosting your retirement savings.

You will need to think carefully about your living expenses to work out the amount you can afford to contribute to your super, ensuring you do not exceed your concessional (before-tax) contributions cap of $27,500 (which will increase to $30,000 from July 1 2024) to avoid paying any extra tax.

Your employer or payroll department can help you set up a salary sacrifice arrangement.

Checking your budget

This is a good time to revisit your financial goals and how you’re tracking and then put together a strong budget for the new financial year that will help get you further along the track.

Take the time to review your income and expenses and identify any areas where you can cut back spending or improve your income.

This exercise not only helps you understand your financial habits but also allows you to reallocate funds towards your goals, such as paying down debt, building an emergency fund, or increasing your investment contributions.

Consult with professionals

Don’t forget to check in with your trusted advisers – financial advisers, accountants, or tax professionals – to make sure you are making the most of any opportunities for financial growth and maximising tax savings.

Taking advantage of our expert advice to review your current financial situation and goals, and check that you are making the best decisions for you can make a difference. It provides peace of mind, ensures that you are complying with any obligations and, importantly, puts you in the best position to achieve your financial goals.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

At this time of year, many property investors feel overwhelmed by the extra tax admin suddenly looming over them. However, if you switch your wintery end-of-financial year (EOFY) mindset to a sunnier new year one, you might find plenty of ways to plan for a more profitable future at the same time as you close off the year. Here are some ideas to get you excited about doing that admin.

First up, you can’t do anything if your paperwork is a mess. If you routinely find yourself drowning in a shoe box of paper receipts and spending hours searching for emailed supplier receipts, it might be time to invest in a better filing system for next financial year. Many bookkeeping programs have them built in. Check out what systems like Zero and MYOB offer and ask other people about their filing habits.

Improving your profit margins and cash flow

The most important numbers for most investors are cost versus profit. If they’re not what you hoped, EOFY is a good time to take stock and plan how to improve them over the coming 12 months. Start by checking if you’re still on the best interest rate and if you need to adjust rents to cover repayments. You may even need to explore selling underperforming properties and reinvesting elsewhere or trimming your renovation budget.

Making the most of your costs and deductions

If you’re panic spending on last minute deductions that may not be the best fit for you, it could be a sign you need a longer-term plan for effectively investing in your property business. Creating an action calendar could help improve your profit margin and cash flow by planning what property issues to address and when. You’ll feel more in control and have more time to research your options and buy what really suits your plans – whether its decoration for short stay properties, scheduling maintenance and upgrades on rental properties or expanding your portfolio.

Charity giving is another area that can benefit from some forward thinking. Instead of this year’s hurried one-off donation in late June, why not talk to your favourite not-for-profits about ways you could help throughout the year? They may be looking for an event, activity or kit sponsor. If it’s something related to your work area, it could be an apprenticeship, study or internship you offer. You’ll be helping where it’s needed and boosting your profile and contacts at the same time.

Cancel what you’re not using

As you’re going through your expenses, it’s a good time to cancel any subscriptions or services you don’t use anymore. These could be streaming services, online magazine subscriptions or computer programs that you don’t really use. If you only use part of a program, say Adobe Creative Suite, you may be able to reduce the fee by only paying for that part. You could also explore switching to newer offerings like the free Google Docs instead of paying for Microsoft Office.

Check your super contribution limits

Make sure you’re up to date on current super contribution limits before making any one-off payments to your fund. Penalties for over-contributing can be significant. Don’t forget that if you’re over 55 and have, or are planning to sell your home, you may be eligible to add up to $300,000 into your superannuation. You can check the current contribution limits on the Government’s MoneySmart site or talk to your super fund, accountant or financial adviser.

If you‘d like an update on your lending in relation to your investments, please get in touch. We’re happy to help any way we can to make your property journey as rewarding and as easy as possible.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.