Q's to ask accountant to test their IP knowledge

Since my wife and I are looking to get into IP, I need to identity a good accountant. Our logical first thought is to use our existing accountant, whom we have used for close to 10 years for our personal income taxes.

But preparing a basic tax return is not the same as having in depth knowledge about property investment and its tax implications.

Apart from obvious "interview-style" questions that I should ask him like "do you invest in residential property", "how many" blah blah blah, what are some more "technically challenging" questions I can ask to give them a mental workout and see where his answers sit?

Preferably questions of the nature that an accountant with good IP knowledge will be able to answer immediately, and someone who has limited experience will have to "hit the books".

Seeing you are in Vic the ONLY questions you need to ask are:

1. Does your name start with D ?
2. Does your Surname start with G ?
3. Do you subscribe to the Somersoft Forum
4. Have you written a logical publication about tax and IPs, and structure .

Gee, sounds just like our dale doesnt it.

Seriously why reinvent the wheel KM, Dale will look after you AND as a bonus wont bore you to tears.


It's a good point Rolf, but I guess I was simply being fair to my existing accountant with whom we already have a relationship.

Dale would actually be my next port-of-call (assuming he's not busy enough!) if my A/C didn't pass the "test".

I would ask those questions plus:

Does he/she attend annual seminars on property related tax issues?
Does he/she read books on investing? If so, what are the last couple read? Would they recommend any books?

This will give you an inkling into whether or not they are actively involved or just theoretically inolved.

Steve McKnight used to have a 20 point checklist of questions to ask. I'm not sure if they are still available on his web site.

Steve's website is still there... don't know if the "Free Report" on how to find a good accountant still works


As for Jan Somers... her first book "Building Wealth through Investment Property" was first published in 1992 and has been very widely read. I am continually surprised at the number of people I meet who have read it.

If someone is keen on property investing and reads books to keep up to date on things (like all good advisors should), then they would have at least seen Jan's books in the bookstores !
Hi Kevmeister,

My wife and I just went through the same exercise in Sydney. We interviewed 4 and then stopped from exhaustion as they were all pretty shocking. But these are some of the questions we asked as they were important to our particular situation. For each question we knew the answer, but we kind of faked ignorance. eg, "my brother told me this, is this true" etc.

1. Can I move out of my PPOR for any reason and still have up to 6 years grace before the CGT exemption for a PPOR runs out?

2. If I use an offset account linked to an IO loan for my PPOR, what loan amount is tax deductible if and when I move out of the place, convert it into an IP, and use the funds accumulated in the offset acount as a deposit for my next PPOR???

3. What do you think about a family trust for our situation? (There was no correct answer for this, we just wanted to test their overall knowledge about the issue and whether they have an insight into the advantages it would offer us as investors who needed asset protection)

There were a few other questions we asked, but they aren't related to investment property. You'd be amazed at how many accountants got the first 2 questions incorrect. It was quite scary.

There was actually only one accountant who got the first 2 correct out of the 4 accountants we interviewed. But he was kind of a weird person who we both just felt uncomfortable with (from a personality point of view). Plus, he was steadfast against us using a family trust and despite us repeatedly telling him we wanted to accumulate a lot of assets and then retire early, he didn't seem to have any concept about the need for income splitting upon our early retirement.

Hope this helps.

Yeah, my wife went through the same kind of thing - about 8 separate accountancy firms here. Sometimes she'd come home swearing that SHE should have charged THEM for the accounting education they received at her hands.

And as for the conept of family trusts and timeframes longer than 1 financial year! Well, no wonder they're into stocks and shares.

The accountant with expertise in property in the largest firm in a nearby town told me at a seminar that building depreciation was not available on pre 1997 repeat 1997, IP's if there initial use was PPOR. I thought he must have been joking but he was serious! I don't use him and don't intend to. However several of my friends do and swear by him. They claim that he is quite good with the depreciation he allows for them.
A week after our discussion with me pionting him in the direction of a QS he acknowledged that capital works depreciation was available back to 1987 only, on residential premises. Enough said!!

The motto of the above story is that it is not just the difficult questions that should be asked.

Errr...excuse my ignorance - what's the answer to this question???

2. If I use an offset account linked to an IO loan for my PPOR, what loan amount is tax deductible if and when I move out of the place, convert it into an IP, and use the funds accumulated in the offset acount as a deposit for my next PPOR???
Originally posted by littlemaze
2. If I use an offset account linked to an IO loan for my PPOR, what loan amount is tax deductible if and when I move out of the place, convert it into an IP, and use the funds accumulated in the offset acount as a deposit for my next PPOR???

You may get differing answers to this question - depending on what people's opinions on offset accounts are.

The advice I have been given by my advisors is that ALL of the interest would be deductible in the scenario you painted - this is why this is the ideal setup for financing a PPOR - if you can get an IO loan for it !

Make sure your advisors are willing to back you up if the tax department comes knocking - so get your own advice !
Hi all

I will Never forget the poor girl who asked her acctant as to why he suggested she not use a trust structure - indeed she had heard many good things about such a beast. The accountants reply

"Go and have a Bex and a lie down love"

Needless to say the acct is down at least one client.



When I was looking for a new accountant closer to home I had meetings with two different ones in Brisbane. These were both ones that had been recommended to me as being "in the know about investment property" even one who was on Geoff Doidge's expert panel. Both tried to convince myself that I should not be holding investment properties in a trust. This was despite myself having owned a number of trusts for over four years at the time and having a solid knowledge of how they and businesses worked.

Yep good advisors are hard to find. Makes DaleGG's advice even more valuable.


Hi Sunstone

You will find the same reason why acctants to steer people away from "complicated" structures, is the same as some mortgage brokers.

Ignorance and Fear of the unkown