For property investors, it’s important to be able to assess your financial position and how your properties performed so you can make smart decisions, especially around tax.
To help, our Senior Development Manager, John Hall, has prepared some property tax tips that may come in handy over the next few weeks.
1. Keep your documents in check.
Have the summaries of your rental income and expenses all prepared, including all bank statements and loan documents. This way, everything is ready to lodge, rather than having to source everything in a rush.
Your Property Management team should help make this easy for you.
2. Order and pay for a tax depreciation report.
A quantity surveyor can produce a depreciation schedule to allow you to claim the maximum depreciation. You can also claim the surveyor’s fee too.
Your Property Manager can also help arrange this for you.
3. Inspect your existing property before year-end and claim the travel expenses.
Remember that all the travel costs you incur to inspect your commercial investment property are tax-deductible (this is not for residential properties, unfortunately).
4. Take note of any repairs.
It’s possible to claim a certain percentage of repair and maintenance expenses after one year of owning the property. Check in with your Property team to ensure these are all recorded.
5. Be mindful of your interest expenses.
Interest expenses from your mortgage are the only ones that are tax-deductible.
If your account was used for both your property investment and for personal use, you must clearly identify which interest payments are for which.
6. Pre-pay non-capital expenses.
Pre-paying expenses such as insurance and interest costs can provide you with an immediate tax deduction, especially if you’re on the verge of being included in a higher tax bracket.
7. Manage capital gains effectively.
If you are thinking of selling your property, be aware of the date on the sale contract. The date of the contract (not the date of settlement) determines the timing of the capital gains tax event. You may be able to defer the taxing point of your capital gains for another 12 months.
8. Manage capital losses properly.
Capital losses earned in any year can be carried forward to indefinite periods if your capital gains can’t absorb them in the same year.
Which of these tips are you going to implement? You’ll notice that most of these tips involve having a good Property Management team right by your side.
Our Upstate team pride themselves on offering the best, proactive service for every one of our clients.
Is it time to do an obligation FREE property health check?
Can we ask: how often do you think about your investment property?
It earns you rental income and, of course, your agent contacts you here and there. But do you know if it’s working hard for you? Is it earning what it should?
We’re Upstate and we’re on a mission to help every landlord across Sydney’s Northern Beaches know their investment is earning what you deserve.
That’s why we’re offering a free, quick property health check. You’ve got nothing to lose and takes only a couple of minutes. Give it a try.
The property health check will determine:
- If your investment is earning the highest weekly rent
- How to maximise your property’s return
- Trends in the rental market you need to know
- How your property compares to others
- If a quick refurb or reno will optimise its value
- What other local investors are doing
We’re always here for you – especially during this time, with everything happening at once (COVID, property market fluctuations and EOFY).
On top of supporting you to maximise your savings at tax time, you can also take advantage of our Upstate finance team who have recently saved clients over $16,000 in the first year from just a refinance of their home loan – all of which started with a 5 minute conversation!
Please note – this is general advice only, and doesn’t take into consideration your own specific circumstances. Please consult your financial and accounting professional for more specific advice surrounding your situation. This blog is not intended to serve as financial advice. If you would like a friendly chat with our Finance Specialists Damien Wallace and Justin Purll you can contact them on 0403 316 686.