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Repairs, Maintenance or Improvements?

Repairs, Maintenance or Improvements?

This is a question that has risen many times among all types of investors “I am confused about  repairs, maintenance, and improvements? How do I know what the best deduction will be for me”

Investing in property requires work from the buyers, not just the accountant because it affects your tax deductibility . After all, it’s you that ends up signing the lodgement and the tax department to eventually audit

Most investors primary focus is on rental returns and capital gains. But it’s the smaller things that can add up very quickly so it’s a good idea to keep a record of every item your purchase no matter if it’s old, or brand new. Now we don’t want to confuse the issue here. So let’s look at the three definitions a little more closely and hopefully understand things a little better.

A repair is should be very easy to determine. Like if you were to repair your mobile phone like I just had done with my wonderful friends in Adelaide. The definition of a repair is to partially restore something back to its original state

Maintenance , however, is ongoing work that ensures it will continue to perform the way its was meant to from the day it was applied. probably the most obvious example would be to repaint the exterior or interior of the investment property

An  Improvement is to make something that was functional but to enhance its performance . This is where it can get a little sticky as you may want to compare this closely to repairs. They key point to remember here is that in most cases repairing is applied when its is required to be fixed where an improvement is enhancing something that was already serving its purpose. Confused ? I can certainly understand why.

When it comes to that wonderful time of year and we need to lodge our tax returns, it’s a wise move to have your investments property invoices, bank statements and lease statements all in a separate folder. You will find it much easier to work out what the costs were and how much rent you received. Its will also reduce your accounting fees as it makes life much easier for the accountant to audit when it’s all place nicely for them to check.

Just keep in mind that repairs and maintenance are direct costs so you should be able to claim them straight away. You obviously to discuss this closely with your accountant.

Improvements are simply enhancing the property or not something that was life threating or required to be done at a certain date. Although you should be able to claim the improvement costs, it’s more likely you would do this when you sold the property and use it to reduce the capital gains you may have made.

Now before you run off and quote me on all the above, I would like to reiterate that I am not an accountant or have any qualifications to advise you on this. I can only give you these examples based on the investment properties I have had and based on the current tax laws. Policies can change very quickly and when its time to do your tax, some of the information being discussed may be different.

Always get the proper legal and tax deduction advice from your qualified accountant and that relates to your personal situation. We are all different people.






Rebates and Coupons

Hi Everyone,

I haven’t posted up anything for a while. There should be so regular postings as we cruse into the middle of May – say what ? yes May. who can believe how fast this year has gone. tax time really kicks of in June as every one pulls out the receipts looking for a back door to try and reduce their tax. I know i do. Better in your pocket that the tax man. In fact, you should always be looking out for a deal , coupon or reducing your expenses. That includes the tax. Did you know if you ever buy something, through the word coupon behind it. Its amazing how many are out there. I know its an american thing but we follow them when it comes to this type of thing. The same with rebates. you can throw that word behind big purchases to see what you might get back in you pocket. I recently checked out what i was entitled for with solar panels. thought i might get them in now before the summer rush. Spoke to some really cool ( pardon the pun ) dudes at Perth Solar Power Installations who really had some good advice. Even helped me out with the forms and what I was up for. Thanks boys !. My point here people is that when it comes to saving a buck, you have to check. It only takes a second to jump online and take a look. So if your looking up a service Say carpet cleaning, through the coupon after it in your search and bingo, savings galore. If you looking for  a solar panel or service that help save the environment or that the good ole government might have their hand in, throw in rebate.

We have to use a little common sense here and there are somethings you just would search for. But the big ticket items and competitive services, its a must do.

Just like tax time. Make sure you start up a nice clean folder and put it somewhere you know you will remember. Throughout the year, load up the file with every receipt you can.When it gets close to tax time, sit down with a cuppa and go through them. Dont miss out on any opportunity to save some money.

Thats what is all about.

Ok people, keep you eye out for some blogging cause its close to tax time and time to save some cash.


Local Accountants

Local accounting

Well, lets just kick things off straight away by shouting out to our friendly businessaccountantsperthwa who I have had

dealings with over the years and really got me involved in this wonderful world of figures and calculators in the first place. They really know their stuff and when it comes to taxation, you really do need to be an expert. 

Each tax situation of each client is unique. For that reason, you need an expert and the right advice so it can be personalized t to suit to their needs. Tax is constant and complexly changing. There is so much to know ad he laws are changing all the time. Everyone seems to have an opinion of their tax and if your standing around at a BBQ it sometimes feel frustrating when you here other people’s stories and deductions. Just keep in mind that everyone’s situation is different and incomes will be too. The accountants need to have a strong knowledgebase so they can offer a complete range of taxation services such as personal income tax, FBT, company and trust tax, payroll tax, GST, capital gains tax and so on. 

The laws are also changing again on the type of advice accountants can offer which means they will soon be more qualified than they are right now.

Whatever your view, accountants can offer you a wide range of services and if you find the right one, they may just save you a lot of time and money.


Welcome to Arrow Tax

Welcome to Arrow Tax

Welcome to Arrow tax

Hi everyone and welcome to our humble little site Arrow Tax IInc.

Now don’t be thrown off thinking this site will be boring and only about the one subject – TAX ! Yes it’s called arrow tax iinc but that is mainly because of my grandfather who was a tax accountant going back years ago and his company name was Arrow. He loved the “incorporated” tag even though it didn’t really mean much. It made him feel important and that it would command respect from his clients. I doubt there was too much thought into the arrow part but go figure!!

Anyway, just a short introduction to what will hopefully be a great little blog site about Tax, Money, accounting, business, finance and anything really that may be headlining the world news. it will also be about local businesses that I have done work for , what they are about and why I think it’s worth letting the world know all about it.


I hope you enjoy this site. If you need to contact us about anything, please send an email through the contact page. It won’t be monitored so please be patient in us getting back to you -if ever!!