Dee Why / Collaroy Blog

TAX TIME TIPS THAT WILL SAVE MONEY AND BUILD WEALTH

With the end of the 2017/18 tax year rapidly approaching, it will pay big time to bone up on ways to extend the tax benefits of owning a rental property. Better still every legitimate dollar you can claim will contribute to long-term wealth creation.

Whether you’re a long-time investor or a new landlord, take a moment to acquaint yourself with the following tax tips

Learn what is ‘tax deductible’: You can claim as a tax deduction those expenses you incur by owning an investment property, including accounting fees, advertising costs, maintenance and repairs, landlord insurance, and more.
Understand the difference between a capital improvement and a deductible item. Simply put if you repair a retaining wall, this is maintenance work, and the entire fee is immediately tax deductible. Conversely, if you build a retaining wall, this new structure is deemed a capital improvement to the property, and the costs are claimed over a longer period.
Prepare a depreciation schedule: To help keep tabs on depreciation, engage a specialist quantity surveyor such as BMT to complete a “Tax Depreciation Schedule,” which outlines the deductions and depreciable items available on your investment property.
Seek further advice: The ATO continually monitors rental expenses – and periodically will change the rules. Be sure to talk to your accountant about the impact any tax changes have on your investment property portfolio.
Speak to your property manager: Ask your Raine & Horne Dee Why/Collaroy property manager for a statement showing all the costs incurred during the year, including property management fees, advertising, and maintenance work.
Stay ahead of your paperwork: To make it easier to claim the expenses incurred by owning your investment property, be sure you keep all receipts in a safe place. Using your smartphone or tablet to scan and store receipts electronically will make them readily available when your accountant needs them.

If you need more tips about how to plan for the end of the 2017/18 tax year be sure to give your property manager Raine & Horne Dee Why/Collaroy a call on (02) 9971 9000.