Tax time is fast approaching, and if you own an investment property, a different set of rules apply when you’re filing your tax return.
Kasey McDonald, head of growth and leasing at :Different told Yahoo Finance her top tips to make sure you stay on the right side of the taxman.
The most important step for property investors is to get started earlier rather than in October, and bring in the experts to help you, McDonald said.
“Your property manager plays a pivotal role and will ensure you have all the bits you need to make the right claims on your property.”
Keep thorough records
Collate all key documents you’ll need to claim items relating to your investment property and provide a breakdown of income and expenses.
Doing so will streamline the process for your accountant, McDonald said, and you’ll get your return much faster.
Freshen up the place
Before the 30th of June (when the tax year ends), be sure to update your property or action any maintenance or tax-deductible improvement work.
“This could be updating appliances, installing air conditioning or heating, or upgrading the outdoor deck,” McDonald said.
“Doing it before the cut-off date means you can get a tax depreciation this year instead of waiting another 12 months.”
Just make sure whatever maintenance you do, doesn’t disrupt your tenant.
Remember to depreciate
McDonald said another thing property owners often overlook is getting a depreciation schedule.
“Property owners can claim depreciation from the wear and tear of assets in their investment properties,” she said.
“This depreciation can be claimed in your tax return each financial year and can help you save thousands.”
Ask for help
Keep in mind, this is the first year many property investors are navigating through government stimulus packages such as JobKeeper.
Chat to the experts - your property manager and accountant - to see if there are extra materials from Centrelink or your bank that you may need to provide.
Lastly, don’t forget to visit the Australian Tax Office website to see what other incentives are available to you.