There are important considerations to be made for property
investors pre-tax time, an expert has highlighted.
In a market update, Mayfair
Finance’s Andrew Rowlands shared his pre-tax time checklist for property
"If you’re like most property
investors, trawling through receipt upon receipt to tally up your allowable
deductions is probably not your idea of fun,” Mr Rowlands said.
"So, as tax time looms, we wanted
to share our pre-tax time checklist to help make things just a bit easier for
It’s important for property
investors to take this time to organise their receipts and records, according
to Mr Rowlands. "It’s time to dust it off that shoebox of receipts and get your
paperwork in order,” he said.
"If you discover the ink on some
of the receipts has faded, keep in mind that you can use a bank statement as
evidence of when the purchase occurred. It’s a good idea to sort the expenses
into various categories, such as strata levies, rates and water charges,
property management, and maintenance and repairs.
"Creating a spreadsheet or using
an expense tracker mobile app may also be a better idea than the old shoe box
filing method, as you can track your expenses throughout the year and when tax
time comes, more easily sum up amounts for inclusion in your tax return.” Equally
important is that property investors consult their tax accountant, Mr Rowlands
"Just like you’d use a
hairdresser to cut your hair, or a mechanic to fix your car, it’s important to
seek expert advice from a professional tax adviser about your investment
property and tax return, so that you can be sure it’s done correctly,” he said.
"They will be able to answer
tricky questions about whether you have to pay goods and services tax in
relation to your rental income, or set up Pay As You Go tax instalments (these
may be necessary if you make a profit from renting the property).
"Using an accountant is also likely to save you time and money, as they’ll know
exactly what deductions you can qualify for. After all, you don’t know what you
don’t know! This is why we recommend speaking to a qualified accountant.
Further, Mr Rowlands recommended
property investors to start determining their assessable rental income.
"For those who are new to
property investing, your rental income is the total amount of rent and
associated payments you receive, or become entitled to, when you rent out the
property. The full amount of rent you earn must be noted in your tax return.
Talk to your accountant if you have any issues working it out,” he said. "Review
your loans and finances. The end of the financial year is a great time to
review how your investment property is performing and to review how well your
loan is serving you.”
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Thursday, 4 June 2020