Tax Tips for Property Investors
If you have income from investment properties, now is the time to start gathering your records and reviewing your expenses for the 2021
Income to Declare
All income earned from each property must be declared. If you have multiple properties, keep the records for each property separate to make
the tax return more efficient.
Rent received, whether paid directly to you or through an agent or through an online management platform. Rent includes recurring regular
amounts as well as any lump sum amounts paid in advance.
- Rental bonds returned for example if the tenant caused damage or defaulted on rent payment.
- Insurance payouts received as compensation.
Expenses reimbursed by the tenant, for example if they have caused damage and you have paid for the cost of fixing the damages, or if they
have reimbursed you for water.
- Extra fees received, for example letting or booking fees.
- Government rebates, for example for installation of solar utilities.
You will need statements or recipient created tax invoices from agents or management platforms and documents for all other payments
Deductible expenses for property are different for residential and commercial properties. Not all expenses related to owning a property are
allowed as deductions, so it’s important to check what you can claim.
- Cleaning, gardening, pest control and property maintenance
There are some expenses which need to be claimed over a longer period such as several years or decades. These can include borrowing
expenses, capital expenditure, depreciation, initial repairs and capital works.
Some expenses cannot be claimed for. These include stamp duty, loans and repayments, some legal expenses and some insurance premiums.
Get Help to Simplify Your Property Records
Tax matters for property investors can be complex. The ATO keeps a close eye on tax returns that involve property investment, as it’s easy
to make mistakes. There are other matters to consider such as the period of rental availability, private use of the property, capital gains
tax, legal contracts and positive or negative gearing.
We’d love to help ensure you are claiming the right deductions to make the most out of your investment property this year and beyond. Please
feel free to get in touch with your WDF Professional contact or phone 02 6921 5444 to talk with us about how we can help make tax time
easier for you.