If the long-term wealth-building potential of owning an investment property in Australia sounds enticing, consider this. However, when tax time rolls around, most investors forfeit some essential deductions. Once you know your claimable components and have expert guidance by your side, not only can you maximise tax returns Narre Warren, but you can uphold your constitutional obligations to the Australian Tax Office (ATO) as well. Your total deductions can be dramatically impacted if you plan ahead and keep good records all year. Working professionals prevent you from missing out on less-known claims that might add up to considerable savings
Know What You Can Claim
As a property investor, there are numerous expenses that you can deductible with respect to owning, managing, or maintaining your property. This process is a lot easier if all your records are kept in an accurate fashion.
Common deductible expenses include:
- Interest on the loan and bank fees
- Council and water rates
- The cost of managing the property
- Repair, maintenance, and cleaning
- Fittings, furniture, and appliance depreciation
These simple strategies to boost your tax returns from investment properties should help you to claim more, allowing for a lower taxable income each financial year!
Maintain Year-Round Logs
Common mistake investors make − they wait until tax season to collect information without receipts, statements, and evidence of income, we could forfeit legitimate claims.
Get into the routine of saving digital versions of:
- Income statements for rental properties
- Service invoices and repair bills
- Pricing and insurance of policies
- Loan agreements and interest certificates
You keep in order by using cloud-based accounting software. This way, when it comes to tax time, your tax accountants in Narre Warren will be able to process everything in no time and with high accuracy.
Understand Depreciation Deductions
One of the most underrated gems in property investment is depreciation. This enables you to make a claim for depreciation on your buildings and assets over time.
- Investors in properties may claim depreciation on:
- The building itself (through capital works deductions)
- Furniture and equipment and plant equipment
A qualified quantity surveyor can create a depreciation schedule specifically for your property, which will often unlock thousands of dollars of tax savings.
Separate Repairs from Improvements
While repairs can be expensed in the same year, improvements will be treated as capital expenditures that will need to be amortised over the life of the improvement. A repair is a repaint after the tenants have trashed the place, but a kitchen remodel is an improvement.
Knowing the difference between the two, allows you to claim what you should and avoid the ATO’s scrutiny. Yet another reason why consulting tax accountants is crucial before filing your return.
Leverage Expert Support from Taxxed
Here at Taxxed, we are experts in property deductions for Australian investors. The expertise of our tax accountants Narre Warren guarantees that every expense is classified appropriately and in accordance with existing tax regulations. Whether you have just one rental or multiple properties, we can guide you through a tax-effective path to wealth generation.
With an appropriate pricing policy and pro-experience, you might be able to efficiently handle your money and experience better gains year after year.
