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Take advantage of the new financial year to optimise your investment property strategy. Learn the key tax dates and deductions to maximise your returns.
At the start of the new financial year, property investors have a valuable chance to review and enhance their investment approaches. Here are some ways to effectively gear up for the new financial year.
Knowing the important tax dates is essential in preparing for the new financial year.
There are several deductions available to property investors which can improve cash flow significantly come tax time. Understanding which deductions you’re eligible for and how to maximise them, can help reduce your taxable income andlower potential tax liabilities.
It's important to note that expenses can only be deducted if they are directly related to an investment property.
To claim costs in the same financial year all expenses, including repairs and maintenance, interest, insurance, tax depreciation schedules, and ongoing expenses, must be paid before 30 June. Ensure that all expenses are prepaid before this date to be eligible for claiming them in the same year.
One of the most important steps is to keep detailed records of allincome and expenses associated with the property. A good property manager like DPN will handle this for you. These records shouldinclude rental income, mortgage payments, council and land taxes,insurance, costs of repairs and maintenance, and any other expenses related tothe property.
Keeping records supports claims for deductionsand will help you and your accountant prepare for the new financial year.
While you can prepare your own tax return, theprocess can be quite complex. Therefore, it’s often advisable to seekassistance from a qualified accountant. Accountants play a crucial role inhelping people navigate intricate tax laws and ensure that all eligible claimsare maximised and accurately filed.
Depreciation is the only non-cash deduction available to investors, meaning that no money needs to be spent to claim it.
The ATO allows owners of income-producingproperties to claim a tax deduction for the wear and tear of the property andits assets over time.
Depreciation is claimable under two categories. Capital works (Division 43) deductions are claimable on the building’s structureand permanent assets. Plant and equipment (Division 40) depreciation is claimable on the easilyremovable or mechanical assets.
Investors wanting to maximise deductions andlower their taxable income should be claiming depreciation. Claiming depreciation allows investors to recoup a portion of the costs associated withowning and maintaining an investment property.
Because depreciation is the only non-cash deduction available toinvestors, no money needs to be spent to claim it.
BMT Tax Depreciation is Australia’s leading supplier of residential and commercial taxdepreciation schedules. BMT find their residential clients an average propertydepreciation claim of more than $11,000 in the first full financial year.
Bradley Beer (B.Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT TaxDepreciation. Contact 1300 728 726 orvisit bmtqs.com.au for Australia-wide service.
The information provided in this article is ofgeneral use only and should not be used as a quote or advice. BMT recommendconsulting an accountant before making financial decisions. Contact BMT for a specialised tax depreciation schedule.
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