Seven actions for landlords at tax time

The calendar year is flying by and, as a landlord, there’s no wrong time for you to start thinking about preparing for the lodgements of your tax returns. Though the official tax year is a few months gone, we have a large number of clients who are yet to finish their lodgement so we hope that this information is beneficial.  

If you are yet to finish your tax return for last financial year, now is a good time to be gathering your paperwork and checking the residential rental properties area of the ATO website to see what you can claim for this past fiscal year.

It’s also a good idea to refer back to your last tax return so you don’t miss any claims. 

Our property management team has supplied all of our clients with their Income & Expenditure report to lodge with their tax return. As a client, this will cover all claimable work we have conducted for you. 

Of course, this won’t be the complete picture. There are other expenses associated with a rental property that can be claimed, too. These will likely include professional services, such as legal and accounting advice, plus council rates and depreciation.

A comprehensive tax return can be the difference between your property producing a negative or positive cash flow for the fiscal year. So, here are seven suggested actions for all our landlords:

• Speak to an accountant – Professional advice is advisable when you’re a property investor. And if you don’t have a depreciation schedule – it’s said 80% of landlords don’t – then see what your accountant can do for this financial year. 
• Contact your property manager – This is an excellent opportunity to discuss the rental market, property values and your Income & Expenditure report. 
• Consider small improvements – If you need to complete any work requested by your tenant, then start planning and scheduling everything now so that it is finished before the end of this current financial year. There's plenty of time but it will fly past so start planning now so you will be able to claim the expense almost after June 30.
• Prepare paperwork – Gather all the receipts related to the running of your rental property. Get them in good order, even if you’re using an accountant. It’s a great discipline as it provides you with additional insight into the financial performance of your investment.
• Know the basic rules – Tax regulation changes every year, so it’s never a bad idea to know what you can claim. These include items such as:

- Interest on your loan

- Professional fees – legal, accounting and property management

- Maintenance costs/strata fees

- Depreciation – You can make claims only if you have a depreciation schedule created by a quantity surveyor.

• Review insurances – This is a good time to check what you’re spending on policies for content, building and landlord insurance. You can claim insurance costs for the last 12 months, and it never hurts to see if there’s a better deal out there and to double-check you’ve got appropriate coverage. 
• Sell later – If you’re on the brink of selling your property, it’s a good idea to delay the transaction until after June 30. That way, you avoid being charged capital gains tax in this fiscal year and can it settle up with the taxman next financial year instead. If you are considering selling please call the office we would be happy to assist with any advice: 03 5974 1100

You’re welcome to discuss any issues or concerns with your property management and, again, we recommend professional accounting advice. 

This information is general only and does not constitute professional advice. You should always seek professional advice concerning your particular circumstances before acting.