First time property investor?
If you’ve taken the plunge this year and are first time property investor, your rental portfolio does mean changes to your tax return this year.
The following tips will help you prepare for this year’s all-important meeting with your accountant.
Cost Base Details
In this first year you should bring all the details in relation to the purchase of the property – the contract, stamp duty, legal fees, loan application fees, inspections etc. These will all form part of the property’s cost base – which needs to be recorded for capital gains tax purposes. It’s much easier to record these details on your file now then to try to find the documents when you sell the property in, say, 10 years’ time.
Depreciation claims against your property can add a lot of value to the annual tax outcome. To claim depreciation you need to pay a quantity surveyor to prepare a Depreciation Schedule. These normally cost between $500 and $1000 (tax deductible) but can add many thousands of extra dollars to your refunds.
If you are not sure what records you should keep and expenses you can claim, contact your accountant BEFORE your appointment for a list of what you need. It will make your appointment much more efficient.
Refunds – Lump Sum or via Your Pay?
Everyone’s family budget is different. Some people like their rental property refund in one lump sum at tax time, while others may prefer just to pay less tax during the year. If you think this latter option might suit you, discuss a PAYG Variation with your accountant.
Not sure what these terms are? Intimidated by the paperwork involved in your new rental property at tax time? To get more information on these or any other rental property topics, contact us on 07 3359 5244, email or reach us on Messenger below.