It’s coming up to the end of financial year (EoFY) and with tax time around the corner, investment property owners can claim quite a few things. Whilst best practice is to gather and retain receipts throughout the year, if you’re like most people, it can be a mad rush come tax time to pull everything together for your accountant.
One thing to note is that you should be accurate with all claims. The ATO has cracked down on rental claims over the past couple of years and will continue to do so this financial year.
Here are a few of the more obvious claims for property investors:
- Property management fees: you’ll likely be shocked at how these add up over the year
- Insurance: any landlord, public liability, contents or building insurance
- Improvements on the property: all renovation work, upgraded appliances, new window furnishings etc
- Interest: the interest on any loan for your investment property
- Rates: both council and land rates
Don’t forget these less obvious claims for property investors:
- Depreciation: you can claim depreciation on everything from flooring and appliances to blinds and furniture.
"It’s a really good idea to get in the habit of keeping on top of your investment property tax deductions and claiming what you are entitled to"
The role of your property manager during EoFY
Claiming for only one investment property may be seemingly straightforward, however for several properties the process can become very complicated. One way of simplifying the paperwork is to have your property manager organise and pay all contractors, rates and other expenses. That way, at the end of the financial year you will only have to hand over the Income & Expenditure report along with any loan and legal details.
It can be a shock to look over all the expenses you have paid out over the year. Especially your property management fees. If your management company takes a percentage that can really add up!
If your property has been unoccupied for an extended period of time during the year and you’re without rental income, you may be out of pocket by a lot. Something to consider for next financial year would be landlord insurance, a totally claimable expense.
It’s a really good idea to get in the habit of keeping on top of your investment property tax deductions and claiming what you are entitled to. Not only will it end up costing you less with your accountant (they charge top dollar to sort through a shoebox of receipts), you’ll stay in the ATO’s good books and increase your tax refund.
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