Whats in the Name Castle Realty

Today I was asked why Castle Realty as a name by a new owner.
Well I said the reason is, every bodies home is their Castle, as its where we feel secure and loved.
We paint, garden,renovate and we nurture our Castle.

So when time comes to move on, let us take your Castle and treat it as our own, and provide the best service we can, to achieve best possible results for you. Whether it be sales or rental investment.

Tenant inspections

General inspections – how to ensure a hassle-free experience

General inspections are a normal part of the renting experience and are generally carried out quarterly, or less frequently. These inspections give tenants an opportunity to raise any repair issues within their rental and allow the property manager/owner to ensure the property is being looked after.

At the Residential Tenancies Authority (RTA), feedback we receive from our customers indicates general inspections can be a source of frustration for both tenants and property managers/owners, so we’ve addressed some of the common issues below to help ensure they run smoothly.

Entering the premises
Property managers/owners must issue an Entry Notice to their tenants at least 7 days prior to undertaking a general inspection and these inspections cannot be carried out more than once every 3 months (unless the tenant agrees in writing).

Entry must be between 8am and 6pm Monday to Saturday, unless the tenant agrees otherwise, and the Entry Notice must specify an exact time or a two hour time period during which entry will occur. Find out more on rules around entering a rental property.

Should the tenant have good reasons to request the general inspection time be changed – for example, if a family member has fallen ill in the home – the RTA encourages property managers/owners and tenants to negotiate and consider re-scheduling the inspection time.

The property manager/owner can also enter at any time without notice if the tenant agrees, but only at the time agreed to by the tenant or if it is an emergency.

Attending general inspections
Under the Residential Tenancies and Rooming Accommodation Act 2008 (the Act), a general inspection can occur without the tenant being present.

Some tenants may prefer to be at home for the inspection, and the tenant may wish to inform and negotiate with the property manager/owner for a time that suits everyone.

Taking photographs during inspection
While the Act does not mention the taking and use of photos during general inspections, the RTA recommends property managers/owners should inform and consult with tenants before taking photos inside their home.

For more information around property managers/owners taking photos inside a rental property home, visit the dedicated tenancy webpage from the Office of the Australian Information Commissioner.

Important reminders
General inspections can bring up a range of sensitive issues for both tenants and property managers/owners, including entering a home, privacy and lifestyle habits.

Respectful and open communication between all parties will help address any issues that arise and encourage a positive working relationship going forward in the tenancy.
Courtesy RTA Qld

Proposed changes could impact investors

New rules on claiming plant and equipment may affect you
In section two of Treasury Laws Amendment (Housing Tax Integrity) Bill 2017, the government has proposed changes to the depreciation of plant and equipment assets. We take a closer look at the potential impacts to those who exchange second-hand residential properties after 7:30pm on the 9th of May 2017 should this legislation pass.

On Tuesday the 9th of May 2017 the government proposed changes to the depreciation of plant and equipment assets in the federal budget.

This prompted a number of property investors to contact BMT Tax Depreciation to discuss how they might be affected. Understandably so, as the last major changes to depreciation legislation were made by the government in the mid 1980’s.

The main concerns investors had were about the impact the changes would have on their existing arrangements, future purchases and more widely on the property market.

The good news for investors is that properties purchased prior to 7:30pm on the 9th of May 2017 are unaffected, as the policy will be grandfathered. This means that any investor who exchanged contracts prior to this date can continue to claim depreciation deductions as normal.

The proposed changes outlined in draft legislation section two of Treasury Laws Amendment (Housing Tax Integrity) Bill 2017, remove a subsequent owner’s ability to claim a depreciation deduction for previously used plant and equipment assets (the easily removable or mechanical fixtures and fittings) in properties which exchanged contracts after the 9th of May 2017.

Properties exchanged prior to 7:30pm on budget night are unaffected.

The draft legislation also confirms that the proposed changes will only apply to second-hand residential properties. Any investor who purchases a brand new property can continue to claim depreciation for plant and equipment as normal.

The changes won’t affect an investor’s ability to claim the capital works component (deductions available for the wear and tear of the building structure and fixed items). Depreciation of plant and equipment for non-residential/commercial properties is also unaffected.

The government also advises that amendments to deductions for plant and equipment assets held in residential properties will not affect those carrying on a business, corporate tax entities, superannuation plans (other than Self-Managed Super Funds) and those who hold a property in a large unit trust.

The below scenario explains in detail how depreciation plays a role in assisting a residential property investor to improve the cash return from their property. It also compares the depreciation deductions for the first full financial year on a three year old house purchased for $600,000 before and after the 9th of May 2017.

In the example, the owner receives a rental income of $560 per week or a total income of $29,120. Expenses for the property, such as interest, council rates, property management fees, insurance and repairs and maintenance total $41,028.

Three year old house purchased for $600,000
Scenario before 9th of May 2017 with 1st year total depreciation claim of $12,397
Annual expenses
Annual income ($560 x 52 weeks)
Pre-tax cash flow (income – expenses)
Total taxation loss (pre-tax cash flow + total depreciation including plant and equipment)
Tax refund (tax loss x tax rate of 37%*)
Annual costs of the investment property (pre-tax cash flow + refund)
Weekly cost of the investment property
Scenario after 9th of May with 1st year capital works deduction only of $6,126
Annual expenses
Annual income ($560 x 52 weeks)
Pre-tax cash flow (income – expenses)
Total taxation loss (pre-tax cash flow + capital works deduction only)
Tax refund (tax loss x tax rate of 37%*)
Annual costs of the investment property (pre-tax cash flow + refund)
Weekly cost of the investment property
Difference = $45 per week

Assumptions and disclaimer

The depreciation deductions in this example have been calculated using the diminishing value method.
*Calculations for the investor’s tax refund have been completed at a standard tax rate of 37 per cent.

In the first scenario, the owner is able to claim a total depreciation claim of $12,397 from both capital works deductions and plant and equipment depreciation.

Using depreciation, this investor is experiencing a weekly cost of $56 per week to hold the property.

In the second scenario, as the owner exchanged contracts on the property after the 9th of May 2017, they are only able to claim $6,126 in capital works deductions and will be unable to claim $6,271 in plant and equipment deductions.

This reduced claim would result in the investors weekly cost of holding the investment property increasing from $56 to $101, a difference of $45 per week or $2,340 in the first full financial year.

It’s important to note that the change will have the same effect on both positive and negative cash flow scenarios.

While we believe that generally the integrity measure has merit, the proposed changes go much further than what is necessary to deliver on the government’s intention of stopping subsequent owners from claiming deductions in excess of an asset’s value. The approach proposed in the draft legislation treats residential property investors differently by extinguishing a property investor’s ability to claim a deductions based upon a transaction.

We believe this is caused by gaps in current legislation around establishing a depreciable value for second-hand plant and equipment.

The government has provided investors with the opportunity to have their say regarding the proposed changes by making a submission. Investors can take part in the public consultation here.

It is important to be aware that a tax depreciation schedule from a specialist Quantity Surveyor is still beneficial and necessary to ensure investors maximise and claim accurate deductions.

To learn more about the proposed changes outlined in the federal budget, visit bmtqs.com.au/budget-2017.

Disclaimer: The information in this article is correct as of date of publication, 8th of August 2017.

Thankyou BTM Tax Depreciation: Bradley Beer

Drug Labs and Suicide- What if its your Investment?

Very rarely does it happen, but it does. What do you do? Does your Landlord insurance cover the expense of the clean up afterwards? Please check your policy carefully.

With the discovery of a Drug Lab in your property is that the Police will contact you or your property manager to discuss the situation.The cost cleaning up a drug lab can run into thousands of dollars as the property is inhabitable. Please refer to the Queensland Health for further information on how to deal with situation and what is required by law to be done so the house can be re tenanted or sold.   Disclosure is required when re renting/selling and a copy of the certificate from Queensland Health that it is now safe to lived in.


Suicide or Death on the other hand is handled differently.

On being informed of a tenants demise, the property manager will inform the owner, and the next of kin will apply for a termination of the lease. With all parties in agreement the tenancy will end.  The property will be returned to how it was on the entry report and will then be ready for a new tenancy.

With suicide you have to disclose to prospective tenants that there was an unnatural incident at the property. One of the reasons for this is that the tenants will eventually find out and that could lead to a misrepresentation of the property and you as owner loosing tenants and incurring additional costs.

Again I would advise that you check up on these yourself, so if you happen to be placed in that position you will know what is expected of you as a landlord/Owner




Section 185 Lessors Obligations

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What to look for in an established rental property?

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Tax Depreciation – Writing off an asset

All about Scrapping and Tax Depreciation – Writing off an asset From MCG Quantity Surveyors Previously I’ve written about how effective lives are determined, which gave a quick insight into the process of ‘scrapping’. In simple terms, scrapping is the process of throwing away an asset that has reached the end of its physical life.