The EOFY Checklist Every Property Investor Needs

May 14, 2024

The end of financial year (EOFY) is fast approaching, and for property investors, it’s a time to focus on tax obligations and optimise your investment strategy.

While choosing the right property is important, maximising returns requires tax-savvy decisions. This blog offers updated tips to navigate EOFY tax time and make the most of your investment.

1. Record-keeping is Key (From the Beginning)

Solid record-keeping is crucial. Maintain meticulous records of income, expenses, and other relevant information related to your property from the outset. Here are some tips for a smooth process:

  • Choose a user-friendly system: Opt for digital records like spreadsheets or property management software.
  • Document everything: Keep records of all transactions throughout your ownership period. This includes purchase and sale contracts, conveyancing documents, and loan paperwork.
    Go digital: Scan receipts for easy storage and retrieval. Remember, proof of income, expenses, and rental efforts ensures you claim everything you’re entitled to.

2. Know Your Deductible Expenses

Identify expenses eligible for tax deductions. These may include property maintenance, repairs, insurance, agent fees, and some interest charges on your investment loan. The Australian Taxation Office (ATO) website provides a comprehensive list of deductible expenses specific to investment properties.

Get a Depreciation Schedule: Depreciation is one of the best tax breaks available to property investors, but you’ll need a depreciation schedule to claim it. Investment property owners can significantly benefit from having a depreciation schedule prepared for their properties. A depreciation schedule is a detailed report that outlines the items eligible for a tax deduction in an investment property, such as wear and tear to the building structure, fixtures, and fittings. Quantity surveyors or specialist companies can prepare these reports.

3. Assess Tax Instalments

Depending on your situation, you might need to make tax instalments throughout the year. Evaluate if regular tax payments are necessary to meet your tax obligations at EOFY. The ATO offers guidance on tax instalments.

4. Declare All Rental Income

Ensure you report all income generated from your rental property in your tax return. This includes rental payments and any other associated income.

5. Consider Capital Gains Tax (CGT) Implications

If you plan to sell your investment property, factor in Capital Gains Tax (CGT). CGT applies to profits made from the sale, so understanding these tax obligations is crucial. The ATO website has information on CGT.

Disclaimer: This information is a general summary and does not constitute personalised tax advice. Consult with a registered tax professional for guidance specific to your circumstances.

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