Blink and you might have missed it this year, but it really is June, and June means tax time.
Now is a great time to maximise your property deductions and enhance your future cashflow so here are some of our landlord tips for tax time.
 
When it comes to tax it’s best to listen to the experts. Make sure to consult with a qualified tax accountant and specialist quantity surveyor and note that these tips are general in nature and should not be taken as financial advice. 
 

Tip 1 – Find out what you can claim

The first step is understanding what you can claim. When it comes to your investment property you might be surprising by how many deductions you can include! Some expenses that come with an immediate deduction include but are not limited to,
        • Advertising for tenants
        • Bank charges
        • Body corporate fees and charges*
        • Cleaning
        • Council rates
        • Electricity and gas – annual power guarantee fees
        • Gardening and lawn mowing
        • Insurance – building – contents – public liability
        • Interest on loans*
        • Land tax*
        • Lease document expenses*
        • Legal expenses* (excluding acquisition costs and borrowing costs)
        • Mortgage discharge expenses*
        • Pest control
        • Property agent’s fees and commissions (including prior to the property being available to rent)
        • Quantity surveyor’s fees
        • Repairs and maintenance*
        • Water charges.
You can claim a deduction for these expenses the financial year they occur and only if they are paid by you, and not the tenant, and in some cases only when the property is tenanted. Read more about deductions from the ATO here  and note that deductions marked with an asterisk (*) are discussed in detail on pages 15–19.

Tip 2 – Get in before June 30

Regular servicing and maintenance is important to keep your property in the best shape, as well as in attracting and retaining high quality tenants. If you have any outstanding maintenance for your property why not complete and pay for it before June 30 so that you can claim it as a deduction for this financial year.

 

Tip 3 – Speak to a specialist quantity surveyor

 
Claiming property depreciation on any income producing property can significantly increase an investor’s cash flow. Many property investors who self-assess and lodge their own tax returns unwittingly exclude themselves from thousands of legitimate tax benefits.

Frank Gordon can recommend a depreciation specialist who will visit your property and develop a depreciation schedule helping to reduce your taxable income. The surveyor’s fee is tax deductible and the tax savings are usually greater than the fee.

Tip 4 – Keep up to date on what differs this year

This financial year’s compliance may be different due to the impact of COVID-19 so make sure you speak to your tax accountant about how this affects you. If you have found yourself working from home more often, you should consider your home office expenses. The ATO have a helpful guide to home office deductions here
 

Tip 5 – Make sure to keep your papers in order

An oldy, but a goody, make sure you keep records of all income and expenses relating to your rental property including,
        • receipts for expenses, including repairs, maintenance, insurance and purchases of depreciable assets
        • loan documents
        • and tax assessments
        • credit card records
        • tenant leases
        • bank statements
        • rent records from managing agents.

& Remember, records must to be kept for five years from the point you lodge the tax return.

Please Note: Information contained above is general in nature and should not be taken as financial advice. Please seek individual advice from a qualified tax accountant and specialist quantity surveyor.