ATO's 'main residence exemption tips'
The main residence exemption needs to be considered in a variety of situations when a taxpayer sells a property they have lived in. The ATO hopes that the following tips will help in this regard:
Taxpayers should consider if they have started earning income from their home (in which case they may need to get a market valuation for CGT purposes).
When renting out a property that was their main residence, taxpayers need to consider whether to use the 6-year absence rule when they sell their property.
Taxpayers can only have one property as their main residence at a time. The only exception is the 6-month period when they move from one home to another.
Has the taxpayer's residency changed? If so, this may affect eligibility for the exemption.

ATO's tips for correctly claiming deductions for rental properties
Taxpayers who have work done on their rental property should consider the following factors in determining claims for expenses.
Repairs and general maintenance are expenses for work done to remedy or prevent defects, damage or deterioration from using the property to earn income. These expenses can be claimed in the year the expense occurred.
Initial repairs include any work done to fix defects, damage or deterioration existing at the time of purchase. T
Capital works are structural improvements, alterations and extensions to the property, claimed at 2.5% over 40 years (with some exceptions). Deductions for capital works can only be claimed after the work has been completed.
Improvements or renovations that are structural are also capital works. Work going beyond remedying defects, damage or deterioration which improves the function of the property are improvements.
Repairs to an 'entirety' are also capital and cannot be claimed as repairs. Repairs to an entirety generally involve the replacement or reconstruction of something separately identifiable as a capital item (for example, a depreciating asset).
Depreciating assets must be claimed over time (as 'capital allowances') according to their 'effective life'.

Storing correct records for work-related expenses
Taxpayers need to consider what work-related expenses they will be looking to claim in the new financial year, and what records they will need to substantiate those deductions.
Records can be kept as a paper version, an electronic copy, or a 'true and clear' photo of an original record.
Working from home deductions
Taxpayers can use two different methods to calculate their working from home deductions, and they each have different requirements:
With the fixed rate method, taxpayers will need a record of the actual number of hours they worked from home for the whole financial year, and at least one record for each of the additional running expenses they incurred that the rate includes (e.g., an electricity bill).
To use the actual cost method, taxpayers must also keep records for any additional running expenses they incurred, and the depreciating assets they bought and used while working from home, and show how they apportioned work-related use for their expenses and depreciating assets.
Please contact our office if you need any assistance with your record keeping requirements, such as logbook requirements for car expenses.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
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