There are many people who would love to purchase as property overseas. Especially places they love visiting like Italy or Paris. They consider buying a property in these areas as a holiday home. This way they conveniently have somewhere to stay without having to stay in an expensive hotel. They could rent out the place while they are not occupying it in order to pay for the costs.
There is one person who chose to purchase a place in Italy with a group of her friends. She wants to know what the costs is when it comes to taxes and the disadvantages of purchasing a home with friends would be. She found a place in Bagnone. The price of the property she wants to purchase with her friends will cost about $133,000. The only problem is that it needs renovation. She can actually get advice online. There are specific websites she can refer to for help.
It is required of her to add 15 percent at least to cover the costs in purchasing the property. Since she plan to make money on the property, then it is required of her and her friends to figure out the share each of them will be getting by annual tax returns that will be done in Australia. There is no income tax requirement in Italy, but there is a tax treaty in Australia. She will be able to claim similar deductions like owning a property in Australia. This will also include interests and other expenses when it comes to borrowing a property.
You need to keep in mind that you will not get money from renovating the place, but you will get money when it comes to repairs and maintenance to the property. For example, if there is minor repair needed for the wall, then you can get from that. You can not get money if you decide to replace the whole wall.
The second thing you need to know is that you can only get deduction for the time the place is available for tenants. So if you and your friends decide to rent the property for 12 weeks, you can still claim pro rate expenses for the rest of the 40 weeks. That is if the property is advertised and available at the time is the only way for that to be possible.
When it comes to shared property it is a good idea to make sure everything is taken care of legally to avoid to any complications or problems. You want to make sure that your friendship will not jeopardize during this process. There is an international lawyer name Michael Bula in Melbourne that insists on shareholder agreement. It will explain the value share and exit strategy. This is when a member either dies or divorces or they wish to involve another shareholder. This way it can avoid any conflicts that might come across between the shareholders that are involved.
This basically what you need to expect when it deals with buying overseas property. There are things you have to consider, especially when it comes to sharing a property with some other people and the profit that you will be able to get from it when it comes to renting the place. Browse around this site to learn the Most Common Property Investment Mistakes.
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