Accounting
Whose name the property goes into is close to impossible to change after the contract is signed, and a brand new build has depreciation available to it that an established property does not. Both of those are conversations for before you sign.
Coordinated service
Who does what
Citadel Developments coordinates this part of your purchase. Tax advice is provided by a registered tax agent, not by us. Nothing on this page is tax advice, and it does not take your circumstances into account.
The accounting line, in order.
Structure, before the contract
Individual name, joint names, a trust or a company each behave differently on income, on capital gains and on what happens if your circumstances change. We bring your accountant in before you sign, because after the contract the options narrow sharply.
Depreciation on a new build
A brand new property generally has more depreciation available than an established one, across both the building and the plant and equipment. A quantity surveyor prepares the schedule after completion, and your accountant applies it.
Holding costs during construction
Interest during the build, rates, insurance and lender fees all need to be recorded properly from the start rather than reconstructed later. That includes interest that has been capitalised during a repayment pause, which is treated differently from interest you have paid.
Set up for the first return
Records organised from settlement so your first return after the property is tenanted is straightforward, rather than a search through a year of emails.
Three roles, kept separate.
- Citadel does
- Coordination and timingBrings the accountant in before the structure is locked, organises the quantity surveyor after completion, and keeps the records moving to the right place.
- The registered tax agent does
- The advice and the returnsAdvises on structure, prepares and lodges returns, and applies the depreciation schedule to your circumstances.
- You do
- The decisionWith the structure question raised early enough that it is still an open question.
Accounting questions we get.
Can I claim more depreciation on a brand new investment property?
Generally yes. A new build has the full effective life of both the building and its plant and equipment ahead of it, and since the 2017 changes to second hand plant and equipment the gap between new and established has widened. From 1 July 2027 the gap widens again, because negative gearing is being limited to newly constructed dwellings. How much applies to you depends on the build and on your circumstances, which is a question for a registered tax agent.
Should I buy in my own name or a trust?
There is no single right answer, and anyone who gives you one without asking about your income, your other assets and what you intend to do next is guessing. It is the reason we raise it before you sign: after the contract, changing it usually means selling and rebuying, with duty payable again.
How is interest treated during a repayment pause?
Interest that accrues and is capitalised onto the loan is treated differently from interest you have actually paid, and the treatment also depends on when the property becomes available to rent. It is worth raising with your accountant at the start rather than at the end of the financial year.
Does Citadel Developments give tax advice?
No. We coordinate the timing and make sure the conversation happens early enough to be useful. Tax advice is provided by a registered tax agent, and you can use your own.
What can I claim on a new investment property?
Generally interest on the loan, council rates, water rates, insurance, property management fees, repairs and maintenance, and depreciation on both the building and its plant and equipment. A brand new build has more depreciation available to it than an established property because nothing has been claimed against it yet. What applies to you specifically is a question for a registered tax agent.
What is a depreciation schedule and do I need one?
It is a report from a qualified quantity surveyor setting out what you can claim in depreciation each year across the life of the property. For a new build it is usually worth having, because the deductions are at their largest in the early years and an accountant cannot claim them accurately without it. It is a one off cost and is itself generally deductible.
Can I claim interest during construction?
Interest incurred on a loan for an investment property is generally deductible where the property is being built with the intention of producing rental income, including during the construction period. The rules are specific and depend on your circumstances and intent, so this is a question to put to a registered tax agent before you rely on it.
How does land tax work on an investment property?
Land tax is a state tax assessed on the unimproved land value of property you own above a threshold, and the thresholds, rates and exemptions differ in every state. Your own home is generally exempt, investment property generally is not. Because it is assessed per state, holding across several states can work out differently from holding several properties in one.
Will I need to register for GST?
Residential rent is input taxed, so a standard buy and hold investor renting out a completed house generally does not register for GST on that activity. It changes if you are building to sell rather than to hold, which can make the activity an enterprise. Which side of the line you are on is a question for your accountant before you sign, not after.
When should I talk to an accountant, before or after I buy?
Before, and specifically before the contract is signed. The ownership structure is close to impossible to change afterwards without selling and rebuying, which triggers duty and potentially capital gains tax. Half an hour with a registered tax agent before you sign is the cheapest half hour in the whole process.
Start with the number, not the suburb.
A minute to find out where you stand, or call and we will do it on the phone.