{"id":2897,"date":"2022-06-25T08:21:52","date_gmt":"2022-06-25T08:21:52","guid":{"rendered":"https:\/\/royabhishek.in\/urbanbuyer\/7-tax-tips-for-the-end-of-the-financial-year\/"},"modified":"2022-06-25T08:21:52","modified_gmt":"2022-06-25T08:21:52","slug":"7-tax-tips-for-the-end-of-the-financial-year","status":"publish","type":"post","link":"https:\/\/royabhishek.in\/urbanbuyer\/7-tax-tips-for-the-end-of-the-financial-year\/","title":{"rendered":"7 tax tips for the end of the financial year"},"content":{"rendered":"

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Smart property investors use all the legal tax rules to minimize their cash flow leakage and maximise their deductions.<\/p>\n

The government encourages property investors to provide accommodation for those who need it by offering them a range of tax benefits.<\/p>\n

While most investors know about\u00a0the typical tax deductions, such as interest on loans, repairs\u00a0and\u00a0management fees, there are\u00a0lesser-known ways investors can\u00a0reduce their taxable income this financial year.<\/p>\n

But be careful\u2026the tax man is watching you, so make sure you stay within the rules.<\/p>\n

1. Get a depreciation schedule<\/span><\/h2>\n

Property investors, like other business owners, can deduct the amount that assets used to produce income that has declined in value over that financial year.<\/p>\n

\"Young<\/p>\n

This is called depreciation, but estimating the sum that can be claimed is complex, so it\u2019s wise to instruct a quantity surveyor to prepare the most appropriate report for your property.<\/p>\n

By the way\u2026their fees are tax-deductible.<\/p>\n

2. Pre-pay interest and expenses<\/span><\/h2>\n

If you have borrowings against your investment it is worth considering whether pre-paying next year\u2019s bank interest (if fixed) or certain expenses to gain an immediate tax deduction in this financial year would be of benefit.<\/p>\n

This strategy is particularly useful if your income is higher than normal this year.<\/p>\n

3. Replace low-value items now<\/span><\/h2>\n

While depreciation for expensive items such as hot water systems is claimed over several years, it is possible to claim a 100 per cent deduction for items costing under $300 in the year the items are purchased.<\/p>\n

4. Don\u2019t forget to claim borrowing expenses<\/span><\/h2>\n

The costs to take out a loan for your investment property, including establishment fees, mortgage stamp duty and mortgage broker fees can also be claimed, although these deductions must be spread out over five years.<\/p>\n

5. Keep your receipts<\/span><\/h2>\n

With the ATO examining property investors’ claims more carefully than ever, you need to be diligent with your paperwork.<\/p>\n

This starts with keeping all receipts as the ATO considers these verifications that you\u2019ve spent the money.<\/p>\n

At Metropole Property Management<\/a>, we recommend allowing our team to pay for your property\u2019s outgoings.<\/p>\n

This way we keep track of all the paperwork and send you a statement with all your income and expenses for you to pass on to your accountant at the beginning of each financial year.<\/p>\n

6. Find a good accountant<\/span><\/h2>\n

The taxation rules for property investors have become are complicated and sometimes downright confusing.<\/p>\n

And recent changes mean some deductions are no longer allowed.<\/p>\n

For example, the landlord cannot claim travel deductions for inspecting or maintaining or collecting rent for their property.\u00a0 And deductions no longer apply for items certain items that were previously depreciable.<\/p>\n

\"Calculator<\/p>\n

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A DIY approach may prove a false economy so find a property-savvy accountant to prepare your tax returns.<\/p>\n

Now, more than ever it\u2019s important that you get good advice from your accountant on what you can and can\u2019t claim, as well as on structuring your investment for maximum effect.<\/p>\n

Fortunately, your accountant\u2019s fees are tax-deductible.<\/p>\n

7. Don\u2019t cheat<\/span><\/h2>\n

The ATO is cracking down on dodgy deductions and the penalties can be up to double the tax plus interest.<\/p>\n

They are looking carefully at maintenance and repair claims that are really improvements and can\u2019t be written off straight away and false claims for holiday homes are Directly in the tax man\u2019s crosshairs.<\/p>\n

What are your obligations?<\/span><\/h2>\n

If you want to maximise your deductions, it\u2019s important to know how to best manage your tax claim.<\/p>\n

For the most up-to-date requirements regarding taxation and residential rental properties, you can refer to the\u00a0Australian Taxation Office (ATO) website.<\/p>\n

\"Land<\/p>\n

But in short, as an owner of an investment property owner, you must be able to demonstrate that you\u2019ve made every effort to rent your property out.<\/p>\n

Some of your considerations might include:<\/em><\/p>\n