Tax time is just around the corner, and according to First National Real Estate Communications Manager, Stewart Bunn, the key to maximising tax deductions for property investments is organisation and planning.
“At the end of the day, like any form of investment, keeping track of what is happening with your investment and its incomings and outgoings is what it is all about,” Mr Bunn said.
“Keeping receipts to prove your deductions and demonstrate why the expense was incurred is key to deriving assessable income.
“Preparing a depreciation schedule is also a legitimate way to claim tax deductions and if it is done by a qualified quantity surveyor, their costs are also tax deductible.”
Mr Bunn said that tax time should serve as a reminder for landlords to carry out property and pest inspections on their properties.
“This ensures any work required is carried out before the end of the financial year, and can then be claimed as an investment expense,” Mr Bunn said.
“And if the investor purchases any fixtures and fittings costing less than the specific amount set by the tax office, they can claim an immediate tax deduction.
“In addition, the investor may be eligible for a deduction for depreciation on the cost of improvement by a previous owner, provided items are identifiable and itemised in a depreciation schedule.”
According to Mr Bunn there are also financial tips investors should consider.
“This could include writing off borrowing costs over five years or the term of the loan, or self managed super funds borrowing to invest as well as prepaying interest against factors like anticipated future income, interest rates and cash flow impacts,” Mr Bunn said.
Investors are encouraged to seek the services of a qualified and trusted financial advisor “A financial adviser will understand the best options for property investors and their individual financial circumstances.”
Property investment offers the potential for good returns and long-term financial gains, but maximising the tax benefits of this type of investment ensures it works to its fullest advantage.
