Maximising Your Tax Return: 4 Things To Consider

The end of financial year is here and if you’ve got an investment property, and you haven’t already, it’s time to get organised.

Negative Gearing
If you’ve negatively geared your property (ie, borrowed money to invest and the income from your investment is less than the expenses on the property), you can offset the loss from negative gearing against the rest of your income so you reduce the amount of tax you pay.

However, be aware that you can only make a claim during the time the property is rented. If you have lived in the property for several months and rented it the rest of the time, you can only claim for the time it was rented.

Figure Out What You Can Claim
Landlords can actually claim a great deal – just make sure you’ve kept the receipts. You can claim cleaning costs, garden upkeep, maintenance costs and advertising for tenants. You can claim running costs such as council and water rates, which are charged once the property is ready to be rented out.

You can claim interest on funds that relate to your investment property, insurances such as landlord insurance, building and contents and public liability. You may be able to claim property management fees, body corporate fees on strata, ongoing expenses and capital works.

Keep Track Of Expenses
A paint job, putting in new appliances or adding air-con can all make your property more appealing to prospective tenants (and raise its value). And timing these property upgrades to occur just before tax time could mean more potential deductions coming your way. Don’t forget even the little things – such as changing light bulbs or fixing a broken sliding door or hot water system – may also be tax-deductible.

Get A Depreciation Schedule
Want to save on the tax you pay? The ATO lets property investors deduct the cost of depreciation from their overall income – which could mean thousands of dollars in tax deductions.

If you haven’t got a depreciation schedule, you’ll want to organise getting one from a registered quantity surveyor before EOFY. The surveyor will look at the entire property, including the floors, appliances, blinds, carpets, furnishings (if your property is provided furnished) and any renovations you’ve done.