Now is the time for property investors to take advantage of the tax strategies available to them.
The cost of travel to inspect or maintain rental properties or to collect rent is an allowable deduction. Travel expenses can be claimed for preparing the property for new tenants (except for the first tenants),inspecting the property during or at the end of tenancy, undertaking repairs (due to damage or wear and tear) incurred while the property is rented out, maintaining the property (while it is rented) and visiting an agent to discuss the property.
Prepay interest on property investment loans to bring forward deductions by a year. If your loan account is used for both private purposes and rental property purposes, you must keep accurate documentation to calculate interest that applies to the rental property portion of the loan. Prepaid expenses Bring forward any expenditure, such as repairs and maintenance, that would otherwise be attended to after 30 June to claim the costs this financial year. Ensure to distinguish between what the ATO considers a ‘repair’ and an ‘improvement’ as improvements are non-deductible. Keep in mind initial repairs to an established property are not deductible. Consider pre-paying expenses such as insurance premiums, rates and levies to maximise the current financial year’s deductions.
Those with negatively geared investment properties can receive a significant refund upon lodging their tax return. To improve cashflow, property investors can apply for a PAYG variation which allows investors to access their end-of-year tax refund
throughout the year rather than a lump sum. Property investors can lodge an application to vary income tax withholding using a form from the ATO. To continue a PAYG variation, it is your responsibility to reapply yearly for a future variation if your circumstances require it.
Maximise depreciation deductions
A depreciation schedule prepared by a qualified quantity surveyor outlines the tax deductions available, which can help to provide a significant return. The cost of a depreciation schedule is also tax deductible. It is important to review your depreciation schedule to ensure there are no items which are no longer on hand and can be written off.
For advice on property tax please contact our team at Lee and Lee.
Susan Flux, Brisbane
Since that time I known Tony and his team at Lee and Lee, they have provided me with outstanding advice and services regarding my personal, family and especially my SMSF borrowing setup for wealth creation and tax reduction strategies that have since led to financial independence.
I now very clear and feel confident on my future financial goals and taxation strategies and know they can be achieved with Tony’s expert and professional help.
Shukri Barbara, Property Tax Specialists Sydney
Tony’s understanding of the business and tax environments, together with his experience and can do attitude enables him to deliver creative solutions outside the square as much as inside, A positive thinker I find Tony inspiring, guiding clients and associates to a prosperity mindset.
Tony has impressed me with his technical knowledge and execution. He works with honesty and integrity and is generous in his dealings.
John Mu, Internet Marketing Strategist Gold Coast
Tony Lee and his team at Lee & Lee is without a doubt Australia’s number one accounting firm.
Tony has the strategies which are helping me legally minimise tax. He has helped me in my personal development and wealth creation to build a multimillion dollar property portfolio.