As we enter the 2024-25 financial year, it’s time to get your tax affairs in order! Here are some essential tips for property investors:
Consult your accountant
Schedule a meeting with your accountant to review your financials and ensure you’re taking full advantage of all possible deductions and tax benefits. Accountants are well-versed in the complexities of property investment taxation and can provide personalised advice based on your specific circumstances. They can also help you plan for the year ahead, ensuring you’re on track to meet your financial goals.
Pro tip
Regular consultations with your accountant can uncover new deductions and benefits as we draw near to a new financial year. Make it a habit to check in periodically, not just at tax time!
Keep detailed records
Maintain thorough records of all income and expenses related to your property investments. This includes interest, property management fees, repairs, and maintenance and any other costs associated with your property. Detailed records make it easier to claim deductions and provide evidence if the Australian Taxation Office (ATO) requests documentation.
Ensure proper initial repairs and capital improvements
Make sure any initial repairs and capital improvements are accurately documented and claimed.
Distinguishing between repairs and capital improvements is important to understand when it comes to tax time. Repairs are costs incurred to make the property suitable for renting when first purchased. Improvements are anything that makes the property more valuable or changes the character.
Review the interest on your loan
Interest paid on loans for your rental property is generally deductible, but it’s important to ensure you’re claiming the correct amounts. When you take out a loan for an investment property, you need to pay interest on the amount borrowed. You may be able to claim the interest paid on the principal amount borrowed for your rental property.
Are you prepared for tax time?
Make the most of the new financial year. Talk to your accountant about the best strategies for your needs and circumstances.
Disclaimer
Any information provided herein is of a general nature only. No consideration has been taken into your objectives, needs or financial situation. Before acting on this information you should consider if it is appropriate for your situation.