Preparing for Tax Time as a Property Investor
Tax time can be daunting for anyone, but even more so for property investors. As a property investor, there’s so much more to consider (and so many more opportunities to be missed) when filing a return. It’s important to have a thorough understanding of what you can claim, what documentation you need, and how to go about your tax return.
It’s especially crucial to properly handle your deductions if you’ve bought a new investment property within the last financial year. Even if your property is being built, you may be able to claim interest and holding costs.
But even if your investment property is a little older, older properties can have depreciation and other benefits attached to them. Whatever the case happens to be, you should ensure you provide your accountant with the following:
- The settlement statement for the purchase
- Loan documentation highlighting the amounts charged during the setup of your loan
- The depreciation schedule of the property
Going about your tax return
There is no “one-size-fits-all” strategy for handling a tax return, as there are many factors which will determine the ideal path for you. It’s also important to have an understanding of negative and positive gearing, as both can have enormous implications for your tax return.
The best course of action would be to discuss your case with an expert.
What can you expect to claim?
If you’re a property investor, you can expect to claim any number of the following deductions on your rental property or properties:
- Transportation costs associated with rent collection or inspection
- Advertising for tenants
- Maintenance, such as pest control, cleaning and gardening
- Building insurance
- Council rates
- Body corporate fees
- Property management fees
If you’re looking for a more complete resource on what you can claim, the Australian Taxation Office (ATO) provides that here. But once again, property investor tax returns can be especially complicated so the best course of action is to consult with an expert.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re thinking of buying an investment property, you can contact us for advice about the best options for you when it comes to your mortgage. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it.