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New Queensland smoke alarm legislation, review now to ensure you remain compliant

BMT team — Fri, 23 Aug 2019 01:28:24 +0000

Queensland households are set to become the safest in Australia thanks to new fire safety regulations rolled out by the government. Let’s take a look at what these changes mean for those with investment properties in this state and also for those considering buying a Queensland property. Contents: What are the changes? When do the rules take effect? What are my obligations as a landlord? What are the obligations of a tenant? Why comply? Smoke alarm rules vary across Australian states and territories What are the changes? New smoke alarm legislation requires all Queensland residences to be fitted with interconnected photoelectric smoke alarms in all bedrooms and hallways connecting bedrooms with the rest of the property and on every level of the dwelling. The new regulations will affect over 450,000 rental properties throughout Queensland and may result in investors paying up to $2,000 for new smoke alarms. The requirements may seem like a negative due to the financial outlay but understanding how you can make this work in your favour by claiming depreciation deductions to reduce your taxable income will help you to capitalise on your investment while also protecting the safety of your tenants. A BMT Tax Depreciation Schedule outlines all the deductions you can claim for your property, including plant and equipment assets such as smoke alarms. The fee for a schedule is 100 per cent tax deductible and the schedule lasts for forty years. Where landlords fail to comply with regulations, they will be unable to rent their property. Fines may apply as well as possible criminal charges. Tenants residing in a non-compliant property are also unable to renew their lease. The Queensland Government Fire and Emergency Services website outlines the benefits of the new smoke alarms: ‘Photoelectric smoke alarms, also known as optical or photo-optical, detect visible particles of combustion. They respond to a wide range of fires but are particularly responsive to smouldering fires and the dense smoke given off by foam-filled furnishings or overheated PVC wiring.’ Interconnected smoke alarms connect to other smoke alarms in the property either through hard-wiring to a home’s mains power supply or wirelessly when battery operated. The result is if one smoke alarm detects smoke, they are all activated. Regulations require that wireless smoke alarms must be non-removable with batteries manufactured to operate the smoke alarm for ten years minimum without a need to recharge. Research shows that photoelectric smoke alarms are superior in quality to standard smoke detectors and have an increased effectiveness across a wider range of home fires. This would lead to an expected increase in the safety of occupants as well as minimising property damage as a result of early detection. When do the rules take effect? In a ten year phased approach, commencing from 1st January 2017, the Queensland government is rolling out changes requiring the installation of interconnected photoelectric smoke alarms over three specific periods. All rental properties are required to meet these requirements by 31st December 2021. Interconnected photoelectric smoke alarms must meet the Australian Standard AS3786–2014 and be installed according to the following dates: What are my obligations as a landlord? Landlords must ensure interconnected smoke alarms are installed and compliant with the new Queensland government requirements by 31st December 2021. Smoke alarms should display the code ‘AS3786–2014’ on the body of the smoke alarm and they can be sourced from hardware stores, electrical retailers or obtained through qualified electricians. Landlords must ensure smoke alarms are placed on the ceiling (where possible) and installed throughout the property as advised above. They must also ensure each smoke alarm has been tested and cleaned within thirty days prior to the commencement of any new lease. This includes renewal or existing tenancy agreement extensions. What are the obligations of a tenant? Tenants must test and clean each smoke alarm at least once a year. This may involve referring to smoke alarm manufacturer instructions where a ‘test’ button on the device may not be visible. Regarding the cleaning of a smoke alarm, this will usually involve vacuuming the device. Why comply? Ensuring your property and the people with it are protected is paramount. Complying with the rules and regulations surrounding the type and installation of smoke alarms will also ensure you can continue to lease and/or sell your investment property and avoid non-compliance penalties. Acting now will ensure you can secure the services of an electrician to install any smoke alarms required. With the looming deadline and approximately 450,000 Queensland rental properties requiring smoke detector installation, it is likely that demand and costs will increase. BMT staff can assist you in reviewing your current circumstances and provide a tax depreciation schedule that includes forecast of eligible claims for depreciable assets and structures. To learn more speak with one of our expert team on 1300 728 726 or Request a Quote online. Smoke alarm rules vary across Australian states and territories Landlords interested in obtaining more information on smoke alarm legislation across Australia can visit Australian smoke alarms regulations and rules for landlords.

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Australian smoke alarms regulations and rules for landlords

BMT team — Fri, 23 Aug 2019 00:20:36 +0000

Smoke alarm rules vary across Australia, but generally they must meet Australian Standards. Below is a summary of the regulations in your state. It’s recommended to refer to your relevant state authority for specific legislative requirements. Contents Queensland New South Wales Victoria Tasmania South Australia Western Australia Northern Territory Australian Capital Territory Why comply? Depreciation deductions for smoke alarms Queensland New smoke alarm legislation states all Queensland residences must be fitted with interconnected photoelectric smoke alarms. They must comply with Australian Standard (AS) 3786-2014 and are required in all new dwellings and substantially renovated dwellings (this applies to building applications submitted from 1 January 2017). To ensure you remain compliant, and for more information visit New Queensland smoke alarm legislation. New South Wales In New South Wales, smoke alarm compliance is regulated by the Environmental Planning and Assessment Amendment (Smoke Alarms) Regulation 2006 and the Residential Tenancies Act 2010. Smoke alarms installed after 1st May 2006 must comply with Australian Standards AS3786. There must be at least one working smoke alarm installed on every level of a home or residential building where people sleep. This includes rental properties, relocatable homes, caravans and campervans. Fire and Rescue New South Wales recommends additional precautions be undertaken, including placing interconnected smoke alarms in all bedrooms, living areas, hallways, stairways and also within the garages of homes. Landlords are responsible for replacing wireless smoke alarms with new batteries at the start of a tenancy. Once the tenancy has begun, the tenant then becomes responsible for replacing the battery, as required. In addition, landlords are also responsible for replacing hard-wired smoke alarm back-up batteries. Victoria All homes, units, flats and townhouses constructed after 1st August 1997 require smoke alarms that must comply with Australian standards AS3786 and are interconnected to 240-volt mains power. Additionally, a backup battery must also be installed within the smoke alarm itself. Homes constructed after 1 May 2014, which have undergone any major renovations require more than one interconnected smoke alarm installed. Tasmania From 1st May 2016, all rental property smoke alarms must be mains powered or have a ten year non-removable lithium battery. The device must meet the Australian Standard AS 3786 – 2014 or AS 1670.1 – 2015. Tenants must test each smoke alarm and notify the owner or property agent if it’s not working. Landlords must ensure smoke alarms are compliant with regulations and repair or replace the smoke alarm or battery as soon as possible, if notified by tenants of any issues. They must clean, test and ensure all alarms are working correctly prior to leasing a property. Alarms should also be replaced every ten years. South Australia Homes or residential rental properties purchased prior to 1st February 1998, must have a replaceable battery powered smoke alarm installed to comply with legislation. Homes or residential rental properties purchased on or after to 1st February 1998 must comply with Regulation 76B of the Development Regulations 2008 and smoke alarm(s) must be installed within six months from the day of title transfer. They must be a 240 volt, mains-powered smoke alarm or contain a 10-year life tamper proof battery, permanently connected. Homes or residential rental properties built on or after 1 January 1995 must comply with The Building Code of Australia, requiring a 240 volt, mains powered smoke alarm be installed. For any new residences, additions or extensions to existing properties require interconnected smoke alarms be installed and both homeowners and residential landlords are responsible for ensuring compliant working smoke alarms are installed. Western Australia Western Australia’s Building Regulations 2012 requires homeowners to comply with Building Code of Australia (BCA) guidelines on the placement and installation of smoke alarms. From 1st May 2017 all newly installed smoke alarms must now comply with AS3786:2014. Regulations require that smoke alarms for homes newly built after 1st May 2015, must be interconnected to power mains. For those intending to sell or lease their property, smoke alarms should also have been installed less than ten years prior and must be in good working order. Northern Territory Legislation requires hard-wired photoelectric smoke alarms or those with sealed battery units containing a ten year life lithium battery be installed in all residential properties and movable dwellings, including caravans. Any hardwired smoke alarms must be installed by licensed electricians, but battery-powered smoke alarms can be installed by anyone following manufacturer instructions. Property owners are required to test each smoke alarm at least once per year. Where impractical for an owner or investor to personally maintain, test or replace alarms, they can nominate a proxy, such as a property manager to act on their behalf. Tenants are obligated to test each smoke alarm at least once per year and notify the owner or property agent of any smoke alarm issues. Australian Capital Territory The ACT residential Tenancies Act was amended on 24th August 2017. Existing rental property owners have until 24th August 2018 to ensure their smoke alarms comply with the legislation. Property owners must install working smoke alarms that comply with Australian Standard AS3786(1) and with the Building Code of Australia. Working smoke alarms must be installed on each level of the property and with one located in each space between bedrooms. Homes constructed after 1994 must have at least 240 Volt hard-wired smoke alarms. Homes constructed prior to 1994 can have 9 Volt battery-operated smoke alarms. Tenants are required to test and replace smoke alarm batteries as required. Why comply? Ensuring your property and the tenants are protected is paramount. Complying with the rules and regulations surrounding the type and installation of smoke alarms will also ensure you can continue to lease and/or sell your investment property and avoid non-compliance penalties. Depreciation deductions for smoke alarms You can benefit financially from the legislative changes for smoke alarms. Residential property smoke detectors are considered a plant and equipment asset and can be depreciated at a rate of 10 per cent per year over a maximum twenty year effective life. If the smoke alarm costs less than $300, these […]

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Changes to rental property travel expenses

BMT team — Fri, 16 Nov 2018 00:35:01 +0000

Due to recent changes to legislation, property investors can no longer claim rental property travel expenses incurred while inspecting, maintaining or collecting rent from rental properties. New legislation was introduced from the 1st of July 2017 as part of the housing affordability measures, and affects Australia’s 2 million landlords, of which around 1.3 million are negatively geared. “This is an integrity measure to address concerns that many taxpayers have been claiming rental property travel expenses without correctly apportioning costs or have claimed travel costs that were for private travel purposes,” the budget papers say. In this article, we cover: Rental property travel expenses that now can’t be claimed Additional information you must know Rental property travel expenses that can no longer be claimed as a deduction preparing the property for new tenants (except for the first tenants) inspecting the property during or at the end of tenancy undertaking repairs, where those repairs are because of damage or wear and tear incurred while renting out the property maintaining the property, such as cleaning and gardening, while it is rented or genuinely available for rent collecting the rent visiting your agent to discuss your rental property. If you are an excluded class of entity or are carrying on a business for the purposes of gaining or producing assessable income, you are exempt from the new rules. The Australian Taxation Office (ATO) considers an ‘excluded class of entity’ as: a corporate tax entity a superannuation plan that is not a self-managed superannuation fund a public unit trust a managed investment trust a unit trust or a partnership, members of which are entities of a type listed above What you need to know You can still claim a deduction for the cost of employing other parties to carry out tasks on your behalf (such as Real Estate Agents for carrying out property management services such as inspections, or tradespeople for carrying out repairs) The denial of rental property travel expenses applies only to residential premises that are being used by the tenant as a place to live (i.e. property investors). It does not affect: residential premises that you own that are being used by the tenant for business purposes (for example, a house that has been re-fitted into a psychiatrist’s practice, doctor’s surgery, etc mixed-use premises (for example, where there is a convenience store downstairs and living quarters upstairs, but only for that part of the travel in relation to the convenience store) commercial premises (e.g. you are the landlord of a bakery or other commercial property) if you are in the ‘business of property’ as opposed to being a ‘property investor’. To read more about the new depreciation legislation and how this applies to a range of property investment scenarios, download our comprehensive white paper document – Essential facts: 2017 Budget changes and property depreciation visit bmtqs.com.au. Alternatively, for obligation free advice contact the expert team at BMT Tax Depreciation on 1300 728 726.

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BMT still finding an average of almost $9,000 in depreciation deductions

BMT team — Tue, 13 Nov 2018 02:34:54 +0000

Many of Australia’s property investors are still missing out on thousands of dollars in tax deductions each year by failing to maximise or claim depreciation for their rental investments. While changes to depreciation legislation introduced last year have impacted some investors, there are still thousands of dollars available to be claimed by property investors. Despite the changes, BMT Tax Depreciation are still finding clients an average of almost $9,000 legitimate tax deductions during the FY 2017/18 for residential properties. Furthermore, owners of properties directly affected by the legislation changes, i.e. second-hand residential properties where contracts were exchanged after 7:30pm on the 9th of May 2017, BMT were able to find an average claim of $5,651 per year for affected properties. What do the changes to legislation mean for property investors? This legislation has been grandfathered, which means if you exchanged contracts prior to 7:30pm on the 9th of May 2017 you will not be affected. However, for those who exchanged contracts on a second-hand residential property after 7:30pm on the 9th May 2017, you will no longer be eligible to claim depreciation deductions on previously used plant and equipment. What can still be depreciated? There are still several opportunities available to claim tax depreciation for investment properties. New houses are still eligible for deductions on plant and equipment, as are properties considered to be substantially renovated by the previous owner. Plant and equipment assets that have been installed and paid for by you will also continue to be tax depreciable. Other examples where you will still be able to claim deductions for plant and equipment include: Deductions that happen in the course of carrying out a business Deductions for a property held by public unit trusts and managed investment trusts Where the property is held by a corporate tax entity. All property investors can continue to claim depreciation for qualifying capital works. This is considered to be the building’s structure and any permanently fixed assets such as the walls, roof, doors, tiles and toilets. These deductions make up 85-90 per cent of a total depreciation claim. Still unsure what these changes will look like for you? It is essential for property investors to always seek expert guidance on what they can claim to ensure they are not missing out on valuable deductions and risk getting it wrong. If you would like further information on how these changes may impact you and how simple it is to reap the maximum reward from your investment property, contact us on 1300 728 726 . Alternatively, request a quote and discover how we can help you to find and maximise legitimate tax deductions from your investment property and ultimately increase your cash flow.

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Do the depreciation legislation changes affect me?

BMT team — Tue, 25 Sep 2018 01:23:52 +0000

On 15 November 2017, Parliament passed the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017, which brought about some major changes to ‘plant and equipment’ depreciation claims. Plant and equipment depreciation refers to the deductions an investor can claim for the wear and tear that occurs to the fixtures and fittings located within a property. They are referred to as assets, which are considered by the Australian Taxation Office (ATO) to be easily removed from the property. Investors can claim depreciation deductions for more than 6,000 different ATO recognised assets, such as the carpets, blinds, dishwashers, hot water systems, smoke alarms and ceiling fans. Each of these assets is assigned an individual effective lifespan and depreciation rate by which depreciation of the asset is calculated. The depreciation rates and effective lives of all ATO specified plant and equipment assets differ by each individual asset and even by individual industries. The ATO recognises that plant and equipment items will wear out more quickly than the building itself and will likely need replacing sooner. The legislation changes mean that owners of second-hand residential properties (where contracts exchanged after 7:30pm on 9 May 2017) can longer claim depreciation on existing plant and equipment assets located within their property. However, owners of affected properties can still claim depreciation on the ‘plant and equipment’ assets they purchase for their property directly. It is important to note that there are still thousands of dollars to be claimed by Australian property investors, as there has been no change to ‘capital works’ deductions, or building write-offs, which typically make up between 85 to 90 per cent of an investor’s total claimable amount. Investors who have already purchased prior to this date can continue to claim depreciation deductions as before. It’s more important than ever to work with a specialist Quantity Surveyor to ensure that all deductions are identified and claimed correctly under the new legislation. BMT Tax Depreciation will show you how to claim more deductions, pay less tax and see a greater return on your investments. BMT Tax Depreciation schedules are designed specifically for ease of use by Accountants to incorporate depreciation deductions into an investors’ income tax assessment. All information is prepared in full compliance with ATO regulations, meaning that deductions are detailed and evidenced correctly in the event of an audit. Alternatively, you can contact one of our expert staff on 1300 728 726 for a free estimate of available deductions. Find out more about the 2017 depreciation legislation and how this applies to a range of property investment scenarios.

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