Property Landscaping Tax Deductions?

A common question asked by clients!

Landscaping work

How do I treat for tax the cost of landscaping to improve the value of a property?

Landscaping is an improvement to the property and therefore not deductible under section 8-1.

OK, what about landscaping being deductible under Div 43 capital works over 40 years?

Or if not claimable as a capital improvement under Div 43, can we add to the cost base of the investment property as improvements and no tax deduction allowed?

Answer

Costs involved in landscaping a property are generally seen to

Individuals

Personal income tax cuts

Date of effect1 July 2020

 Tax thresholdsTax rateCurrentFrom 1 July 2020From 1 July 20240%$0 – $18,200$0 – $18,200$0 – $18,20019%$18,201 – $37,000$18,201 – $45,000$18,201 – $45,00030%  $45,001 – $200,00032.5%$37,001 – $90,000$45,001 – $120,000 37%$90,001 – $180,000$120,001 – $180,000-45%>$180,000>$180,000>$200,000LITOUp to $445Up to $700Up to $700

Bringing forward the personal income tax plan will:

Increase the top threshold of the 19% tax bracket to $45,000 (from $37,000)Increase the top threshold of the 32.5% tax bracket to $120,000 (from $90,000)Increase the low income tax offset from $445 to $700

In addition, the LMITO (low and middle

JK1 Finished on the 27th September

(JK) 1 finished on the 27th September so all payments for JK 1, Fortnight 13 need to be paid by 27th September and then make the Monthly Declaration by 14th October to receive the  September JK1 Subsidy of $1,500 per fortnight per employee.

JK2 – Starts on the 28th September

What doesn’t change for employers, according to the ATO:-

Employers don’t need to re-enrol for the JK2, if they already enrolled for JK1 for fortnights before 28th SeptemberEmployers don’t need to reassess employees eligibility or ask employees to

JobKeeper Payment Received

Urgent JobKeeper action required forNew Employees by Monday 24th August 2020 The Government has amended the JobKeeper rules to allow more employees to qualify for the JobKeeper payment.This is achieved by extending the eligible employee test to also include eligible employees who were employed on 1 July 2020 (in addition to those employed on the original 1 March 2020 employment date), where they are not currently nominated for JobKeeper payments with another entity. As a result, more employees may qualify for JobKeeper payments from 3 August 2020 (i.e., JobKeeper fortnight 10),

Renta Property Tax Returns affected by COVID-19

Frequently asked tax questions for rentalproperties affected by COVID-19

My tenants are not paying their full rent or have temporarily stopped paying rent because their income has been adversely affected by COVID-19. Can I still claim deductions on my rental property expenses?

The simple answer is Yes 

If tenants are not meeting their payment obligations under the lease agreement due to COVID-19 and you continue to incur normal expenses on your property, then you will still be able to claim these expenses in your tax return.

I’m considering

COVID-19 $150,000 Instant Asset Write-Off

The best tax breaks for small business is the instant asset write-off, a great way for your business to purchase capital assets and get an immediate tax deduction.

As part of the COVID-19 Coronavirus Stimulus Package, the instant asset write off threshold has increased from $30,000 to $150,000 (net of GST) per asset acquired.

This measure applies to all purchases from 12 March 2020 to 30 June 2020 where the assets are used or installed ready for use, in the business by 30 June 2020.

Examples of tax-deductible items

Some of

Employer payments to employees

Job Keeper Payment OverviewSupport for Employers to keep employees on the books!

Employer Register Now for Jobkeeper

The Job Keeper Payment will provide a flat $1,500 a fortnight per employee for businesses to retain or rehire nearly six million workers.Businesses that experience a 30% drop in turnover since the 1st March 2020 will be eligible.

Employers that have already lost their job will be eligible if the business had them on the books on the 1st March 2020.

The first payment will be received by employers from the ATO in the first week

2nd Wave COVID-19 Stimulus Packages

Income support for individuals & Sole Traders

Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.Reduced means-testing:Asset testing for Jobseeker Payment, Youth Allowance Jobseeker and Parenting Payment will be waived for the period of the Coronavirus supplement.To further accelerate access

Corona Virus Stimulus Packages

Low Income Australian

The Australian Government will provide financial assistance to around 6.5 million lower-income Australians in response to the Coronavirus.One-off payments of $750 will be paid to around 6.5 million lower-income Australians, including pensioners, other social security and veteran income support recipients and eligible concession cardholders.This is to help them through this uncertain time and support economic activity.The one-off payment will be paid from 31 March 2020.

Download

Fact sheet: Stimulus payments to households to support growth

Example

Emma receives both Newstart Allowance and Family Tax Benefit as of 12 March 2020. As part

New tax laws were proposed as part of the 2018 federal budget to deny tax deductions on the costs of holding vacant land, that has now been passed and come into effect from the 1st July 2019.  These new laws apply regardless of when the land was held, (no grandfather clauses for pre 1st July 2019 lands).

The
new laws are contained in Treasury Laws Amendment (2019 Tax Integrity and
Other Measures No.1) Act 2019 which received royal assent on 28 October 2019.

Entity Types Affected!

Individuals – (Mum & Dad Investors)Private trusts (closely held