Tax time…June 30 has already been and gone and while a lot of us get excited about our tax returns and EOFY sales, it can also be a reminder that we haven’t been as organised with our finances as we should have been.
Organisation is key for any property investors. This ensures that when the time comes, you have everything you need to benefit from the tax advantages the government offers you as a landlord.
Whether you prefer to keep your records in a digital format or in a filing cabinet, be sure to have these documents prepped and ready for tax time.
TAX Documents to prep
- Mortgage papers
- A copy of insurance premiums paid
- The contract of sale and written confirmation of settlement date
- Receipts for the purchase of depreciable assets
- Relevant statements and credit card records
- A copy of any tenant leases for the financial year
- Any land tax assessments for the financial year
- A list of all relevant costs related to any significant improvements. You may want to consult an accountant to see what costs may be capitalised over a set period
Other important TAX tips
- It is advised that records are kept for a minimum of five years
- Records should be in English or easily translatable
- The cost of repairs and improvements must be separate from depreciation costs. That will enable you to work out deductions and capital gains or losses more efficiently
- If you have expenses that need to be claimed as deductions, you should include; the item, the cost, the suppliers name, and the date of purchase
- When selling, you can claim the costs of the marketing campaign, agent commission, legal fees and more! This will be set against your property gain or loss
Some easy ways to keep up to date with all your property documents is to keep a folder in your email mailbox with any correspondence that you’ve had with your property manager, sales agent etc. Alternatively, you could create a separate property email account that you can use for all your property related communication.
Keeping documents in a Dropbox or similar program will also allow you to easily access your documents from any device if need be!
Finally, as experienced local agents, we also always recommend investors work with a property manager and a financial adviser to ensure all their tax bases are covered. Also, check out the ATO website for more information about investment income from the Australian Government.