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au courant
April 2014
Welcome to 3rd edition of our newsletter.
In this edition, we look at some of the gripes people have with their accountant, the tax issues related to investing in residential property, a quick pre-cursor to the upcoming federal budget, and a few physical developments within our business and in our neighbourhood.
Have a great quarter!
Andrew
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The top 10 gripes people have with their Accountant
People don’t change their accountant very often. Many people will continue seeing the same person year after year, even though they’re not happy with the service being offered. It usually takes a significant event for a change to occur, such as the accountant retiring or selling their practice, the client moving a long distance (less common today with improved communication), or the accountant doing something to make the client really unhappy i.e. a ‘final straw’ moment.
Since starting this business, I have had the opportunity to speak with many business owners, usually after one of these events has occurred.
Based on these conversations, I have put together a summary of the common gripes people have with their accountant, and our approach to avoiding the mistakes some of our competitors make. |
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A Tax Guide to Investing in Residential Property
There are a significant number of tax issues to be aware of when it comes to residential property investment. Some of these issues are straight forward, some can be complex. If you own a residential rental property, it is important to have a tax adviser who has a good understanding of all the issues and how they relate to your circumstances.
One of the biggest challenges I believe property investors face however is the volume of misinformation they receive. There are plenty of people willing to dispense ‘free tax advice’ regarding what you can claim, how much you can claim etc. Unfortunately, a lot of this advice, however well intended, is not always accurate, does not consider the risks and long term consequences or does not relate to recipient’s personal situation.
Another primary source of free tax advice regarding property investment are real estate agents. There are plenty of obvious clichés and stereotypes I could use when discussing real estate agents…though I will resist the temptation. The undeniable fact that potential investors should realise however, is that real estate agents are paid by the seller and are only paid when they make the sale. Serving the long term best interests of the potential investor by presenting a clear and balanced summary of all the relevant taxation issues, positive and negative, may not always at the top of their agenda.
We have put together a plain English guide to the tax issues related to residential property investment, which you can access here.
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Budget Pre-Cursor
History suggests that the first budget of any new government will be an unpleasant one. The May 2014 budget, to be delivered as the first by the new Abbot government, looks as though it will live up to historical expectations.
The government’s recent narrative has focused heavily on the need to reduce the size of the public service, and reduce government spending. As the treasurer bluntly warned recently, ‘the age of entitlement is over, and the age of personal responsibility has begun’.
To aid in deciding where and what to cut, the government, shortly after it was elected, established a National Commission of Audit (NCOA). This independent body was setup to review and report on the performance, functions and roles of the Commonwealth government. The commission has reported its findings to the Government. Details of the findings are expected to be made public several weeks prior to the Budget.
To understand the NCOA’s terms of reference, visit this link.
http://www.ncoa.gov.au/docs/NCA_TERMS_OF_REFERENCE.pdf
The NCOA’s recommendations and what may or may not be included within the upcoming budget is unknown at this stage. Rather than speculate, we intend to provide a summary of the actually changes shortly after they are delivered in May.
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All the signs are good!
You may have noticed the signage we recently had installed at our office at 166 Keira Street, and on the Crown Street wall of the WIN Entertainment Centre.
We are very proud of our brand and enjoy making it as visible as possible.
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Changes in our neighbourhood
Our three year old son Charlie loves seeing cranes, and will excitedly point out the two large ‘Creaky Crankies’ (Thomas the Tank Engine reference for all those without young children) at the new GPT development, whenever he visits his dad’s office. We are equally excited about this new development and look forward to the 80 new shops and 600 new parking spaces opening up next door to our office later this year.
A number of other new large construction projects appear to have gathered pace in the Wollongong CBD in recent months. I hope there will be plenty more ‘Creaky Crankies’ in the Wollongong skyline over the next few years to keep Charlie amused, and as a sign that we are continuing to grow our region.
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