The end of the tax year is nearly here
It’s tax time, and whether you own one investment property or a full portfolio, you can’t escape the end of the tax year. And as 30th June fast approaches, there are some key things you need to take care of if you own an investment property.
Understand your tax dates
The 1st July is officially the start of the new tax year. This means that you have until 31st October to lodge your tax return for the year that has just ended (ie. from 1st July 2018 – 30th June 2019). If that sends you into a tailspin thinking about everything you’ll need to get done, the good news is this date is pushed back considerably if you use a registered tax agent for your return.
Whether you are planning to file your tax return yourself, or you’re going through a tax agent, it pays be organised. There’s no point in throwing an old folder stuffed full of random receipts at your tax agent and running for the hills – it will only mean that you’ll pay them for their time as they sift through them, and you might end up with big holes in your financial record. Try to be as organised as possible with your paperwork to encourage a smooth transition.
Work out what you can claim
When it comes to property investment, there is a huge array of tax claims you can make that will reduce your overall bill. If you don’t do some research into exactly what you can claim, you could be doing yourself a disservice. Some of the claims you can make include:
- loans and interest – claim on the interest from loans used to purchase, refurbish, or refinance your investment property.
- depreciation costs – claim for fixtures and fittings as they get older and wear out, including ovens, dishwashers, carpet and blinds.
- costs of managing the property – this includes fees or commissions paid to your property manager.
- council and (some) utility bills – deduct council rates, water rates and body corporate rates, gas and electricity, and land tax.
- landlord insurance – any insurance related to your investment property including building insurance and LMI.
- maintenance and repair costs – make sure you keep any receipts for plumbing work, electrical work, or even carpet cleaning, gardening, painters, tilers.
- accountant’s fees – you can even claim your accountant’s fees in your return, so it pays to get someone on your side.
Are you positively or negatively geared?
You can’t have a conversation about tax and property investment without mentioning positive or negative gearing. Positive gearing is when the money you spend on your investment property (eg. mortgage payments, maintenance costs and management fees) is less than the money you receive from your tenants each month, giving you a profit. Negative gearing is the opposite where you’re paying an amount of money each month to maintain your property. If your property is negatively geared, you can offset against other income – like your wages – to reduce your tax bill. It’s important you talk to a tax professional about how to do this.
Get professional tax help
When it comes to the end of the tax year, you can be as organised as possible, understand what you can claim, have all of your dates on the back of your hand, and still end up with a headache. It usually pays to work with an accountant or a registered tax agent so you can be sure that you’re getting all the tax benefits that you’re entitled to, and that you can sit back and relax while someone else takes care of everything for you.
At Reventon, we have expert accounting and tax specialists to keep you on top of all your financial reporting and tax returns. There’s not long left of the tax year, so learn more or get in touch today.