Sunshine Coast Region, Queensland
Tax Accountant in Mooloolaba
A repair this year, or a deduction over 40 years
Rental property returns and investor tax for owners of Mooloolaba units and apartments, from a CPA practice.
Flats and apartments made up 47.6% of Mooloolaba's occupied homes in the 2021 Census, and 41.5% of homes were rented, at a median of $400 a week. Of the 4,678 private dwellings, 867 were unoccupied on Census night. Every rented unit has an owner deciding how to treat the money spent on it.
Mooloolaba in brief
From Mooloolah Heads to a harbour suburb.
The name changed from Mooloolah Heads to Mooloolaba in 1919, and the surf club was founded in December 1922. The harbour on the Mooloolah River holds a large fishing fleet and two marinas. The suburb had 8,202 residents in 2021, with a median age of 44.
Three questions for unit owners
Repair or maintenance: deductible this year
Why it happens
A tenant reports a leaking tap, a broken hinge or faded paintwork.
Why it matters
Repairs that fix damage or wear during a tenancy, and maintenance that keeps the property fit to rent, can be claimed in full in the year you pay for them.
How we help
Filing your tax return should feel straightforward and accurate. Ask your property manager to describe the problem on each invoice.
Damage that was there when you bought
Why it happens
A unit is bought with existing problems, such as a damaged kitchen or worn floors, and fixed before or after the first tenant moves in.
Why it matters
These are initial repairs, which are capital and not immediately deductible, even if you didn't know about the damage. Structural items can be claimed as capital works, generally at 2.5% a year over 40 years, while initial repairs to depreciating assets can't be claimed. Replacing a whole structure, or adding something new, is also capital works. Capital works claimed for initial repairs reduce the cost base when you sell.
How we help
Keep the building inspection report from your purchase; it can help show what damage existed when you bought.
Rent and GST
Why it happens
An owner who is registered for GST through another business wonders whether the rent should include GST.
Why it matters
Renting out residential premises for people to live in is generally input taxed: no GST is charged on the rent, and no GST credits can be claimed on related costs such as agent's commissions and repairs. Leasing commercial residential premises, such as hotel rooms, is different and is taxable.
How we help
Keep the rental's costs separate from any GST-registered business so no credits are claimed by mistake.
Frequently asked questions
Can I claim repairs to my Mooloolaba rental unit straight away?
Yes, if they fix damage or wear that happened while the unit was rented. Damage that existed when you bought it is an initial repair and is capital.
What is the capital works deduction?
A deduction for structural work spread over time, generally 2.5% of the cost each year for 40 years.
Do I charge GST on rent?
Not on residential rent, which is input taxed. You also can't claim GST credits on the costs of renting it out.
Where to next
Have a question?
Before the next repair
The result is a return that is compliant and considered, with practical guidance you can carry into the next financial year.
Lomandra Accounting is a CPA Practice, registered with the Tax Practitioners Board and an SMSF Specialist. Emma, the Director, is a Certified Practicing Accountant (CPA) with extensive experience in commercial business management, and specialises in Self-Managed Super Funds (SMSFs).
- 07 5234 9201
- admin@lomandraa.com.au
- Sunshine Coast, QLD
- Monday to Friday, 9am to 4:30pm