The Australian Taxation Office (ATO) has put Australian landlords and property investors on notice this year. Recent changes made to eligible deductions are set to significantly impact many property investors tax positions this year. The ATO have stated that they will focus on mistakes and false claims made by property investors. Uncertain if you’ll be affected this financial year?
Being organised is key
Simple fact. Landlords who keep accurate records of their property investments, income and expenditure throughout the year will be generally in better shape come tax time this year than those who don’t.
That said, the ATO will be putting dubious rental claims for deductions under the microscope such as above the market rental rates, and failing to sufficiently advertise rental properties, normally expected when re-letting a property.
Get good advice on taxable expenses
Mid last year, the Federal Government banned tax deductions for travel-related expenses, meaning property owners could no longer claim the associated costs of travelling to inspect their properties.
The good news is that body corporate fees on properties may still be eligible to claim. And if you’re self-employed and run a home office, you may be able to offset some of the costs in your tax return. This may include internet costs, printing and computer/software purchases, for example.
Let’s not forget that almost 18% of all property investors own homes in holiday destinations. There are a number of benefits to owning a holiday investment such as claiming deductions from seasonal rent plus you can always enjoy it when it’s vacant. It can be very tricky at tax time.
Property investors can only claim these expenses when the holiday home was available for renting, and this means keeping an accurate record of when the holiday home was rented and when it was vacant.
Don’t overlook these expenses
Did you know that insurance policy premiums can be a tax-deductible expense as well as the fees paid to property managers? Both are invaluable in protecting property investors assets but unfortunately they are often overlooked. The end of financial year is a great time to review your insurance policy to ensure you are covered.
There are still many more expenses that landlords and investors may miss out on by under-claiming each year. To maximise your tax and to ensure you’re not claiming incorrectly, seek out a tax specialist who can help. If you’d like our assistance in a reputable agent please contact us today. By the way the tax agent fees may also be claimable next year.
Good luck 🙂