Tax Time Tips For Property Investors

Dilleen Property Group 2021

If you are a property investor, tax time is certainly the best time of the year! Despite only recently passing tax time, I thought it would be a great idea to share my number one tips for getting ready for it.

I have 6 different tips that will help prepare you for the next tax time, and remember it’s never too late to build up good organisational habits for getting tax ready.

Number #1

If you have an investment property, depending on the age of the property, one of the things I would inquire about is a depreciation schedule. I have depreciation schedules for most of my properties. Only some of the properties that I own are somewhat old and have little depreciation in them. However, a lot of them do which is a great bonus.

Even if you have properties that are neutral to positively geared, or even slightly negative, depreciation can still boost up your tax return. When I had six properties and was on an average income, I was getting back about 80 - 90 percent of my taxable income I paid back every year. If you have 2-6 properties under your belt and you have the right property tax account that can help you get deductions back, you can claim a lot of expenses back at tax time, even if they're neutral or positively geared. The tax return may even be equivalent to another property deposit or even a holiday.

Number #2

Make sure that you have your bank statements prepared. All of my properties are scattered across multiple lenders, but the majority I still like to use the big banks. You will usually receive your bank statement via the post, however you can also go onto your banking apps to receive your bank statements to get the exact figures on how much interest you paid on the home loan.

Number #3

Another thing is rental statements. If you have a property manager, whether it's one of the big property management companies or a small company, every financial year they will give you a rental statement. This should have all the rental income you have received, your management fees, and the repairs made on your behalf.

Number #4

Repairs and maintenance are important, especially if you have spent thousands on repairs. unlike living in your own property, you can usually claim a good portion of repairs and maintenance back, which is the beauty of an investment property.

Number #5

Another thing to make sure you have in place or have ready for tax time is insurance statements. This includes tax invoices for how much you've paid for insurance.

You should keep as many receipts as possible. You don't have to have a proper receipt most of time for invoices for insurance, and pest and building inspections. If you have an invoice and you've stamped it as paid, that is usually sufficient enough (depending on your accountant).

Number #6

Property rates are also important factor during tax time. This includes council rates, water rates, management fees . This should all be organised prior to tax-time as you can claim a portion of it back.

I hope these six tips will help you get ready for the next tax time. Having a property tax accountant is a very important facet of property investing and it can take years and years to find a good property tax accountant who actually owns property themselves. If you need help finding a trusted account be sure to check out our recommended partners.

Disclaimer: This is not intended as legal, financial, or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature, you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.