Tax tips for property investors
Owning an investment property can provide great benefits, including additional income and entitlement to tax deductions.
Now is the time for property investors to take advantage of the tax strategies available to them this financial year.
In order to maximise your tax bill in the financial year, complete any maintenance expenditure by 30 June. Ensure to distinguish between what the ATO considers a ‘repair’ and an ‘improvement’, as improvements are non-deductible.
Prepay interest on property investment loans if you have adequate cash flow in order to claim an immediate deduction. Investors may choose to pay interest in advance in order to simplify finances by making one prepayment of interest upfront or protect against possible interest rate rises over the 12 month period.
Investors must maintain a sufficient filing system to substantiate any claims made. The ATO requires you to keep up-to-date records of things such as proof of earned rental income, all incurred expenses, periods of private use by you or your friends, periods the property was used as your main residence, loan documents and efforts to rent out the property.
A depreciation schedule can be provided by a qualified quantity surveyor, outlining the tax deductions that are available and help to provide a significant return. The cost of a depreciation schedule is also tax deductible.
If you require any advice on tax and investment property contact your accountant.
Tax return tips
8th July 2020
Despite the current COVID-19 world in which we live, the procedures for completing and lodging tax returns remains pretty much the same.
So, before we sit down with you (in person or virtually) to... more
Expatriates: Part-year resident or non-resident for tax purposes?
29th June 2020
So what happens from a tax point of view when a person leaves Australia part-way through the income year? How is the income they derived before that time taxed? And how is any income they derived after... more
COVID-19 and residential rental property claims
17th June 2020
Many residential rental property owners have had their rental income affected by COVID-19. As a result of this income year not being business as usual, the ATO has provided answers to some... more