Tax time is quickly approaching and we suspect you may have already fished out your calculator, or called your accountant, and gotten busy with number-crunching your income and expenses for this year.

If you are a new property investor, “Income” includes the amount of rent you receive for the property on an annual basis. “Expenses” (and the things you need to keep a record of)
can include:
– advertising for tenants
– bank charges
– body corporate fees and charges
– borrowing expenses
– capital works
– cleaning
– council rates
– decline in value of depreciating assets
– gardening and lawn mowing
– insurance
– interest expenses
– land tax
– legal expenses
– pest control
– phone
– property agent fees and commissions
– repairs and maintenance
– stationery and postage
– water charges

Much of these records will come from your annual owner statements, however there are some complexities surrounding some items. The trickier ones to look out for are:

Capital Works

Not all repairs and maintenance are fully tax deductible in the one year; ‘capital works’ includes expenses from making improvements to your property such as building constructions and carrying out significant repairs and maintenance. These are deductions that need to be claimed over a period of several years. If in doubt about whether it’s “capital works” or “repairs and maintenance” please always consult a professional tax advisor.

Depreciation

Depreciation refers to the loss in value of an asset calculated against it’s lifespan. These are complex calculations that are best carried out by a qualified Quantity Surveyor, but can result in some pretty good deductions! Contact us if you are interested in pursuing this (now is a good time as the Quantity Surveyor’s fee for service would also be tax deductible if you complete this before June 30!) Remember to keep the receipts and records so that it is easy to calculate the amounts and substantiate your claims over time. Again, you should always seek professional advice if you need help clarifying what is deductible and what is not.

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