The cost of living always seems to be on an upward trend. This often prompts a large number of citizens to adopt seemingly unorthodox ways of saving every last penny.
Perhaps the government understands what the average citizen goes through in an effort to make ends meet. In order to make things easier, the government offers a number of tax breaks for eligible homeowners. Discussed in this article are three of these tax breaks for the penny-conscious homeowner.
This is perhaps the best tax break that a homeowner can take advantage of. The government provides this tax break to eligible homeowners in the two ways explained below:
- A homeowner can claim a tax break for depreciation on building allowance. This comes in the form of a deduction for depreciation of structural components of the property (e.g. concrete structures and brickworks)
- Homeowners can also claim a tax break for depreciation on plant and equipment. This comes in the form of a deduction for depreciation of home appliances (e.g. dishwashers and ovens) and other removable items inside and around the house.
In order to take advantage of this tax break, homeowners need to enlist the services of a licensed quantity surveyor who will prepare a depreciation schedule for the property/properties in question.
The Home Office
In today's society, a large number of professionals work from home thanks to the internet and several technological advancements made over the years. Thus, many people may find themselves using a portion of their home exclusively for work.
The discussed group of professionals can claim a tax break for running an office-cum-home. For example, eligible homeowners would qualify for a deduction on the cost of repairs to the office and a deduction on insurance-related costs.
Homeowners who would wish to take advantage of this tax break are required to prove that the home office is their primary place of business.
Homeowners who use a section of the house to store work-related items (e.g. product samples and work equipment) on a regular basis may also qualify for this tax break.
The Home Sale
The "home-sale" tax break is meant for homeowners who have sold a piece of residential property in the within the last financial year.
Eligible homeowners stand to get a reduction on their income tax for indirect costs related to making the sale. Examples of these costs include, but they're not limited to, the following:
- The cost of pre-sale repairs undertaken on the house
- Advertising-related expenses
- The cost of hiring a real estate agent etc.
Take advantage of the discussed tax breaks and save a penny or two!