Taxes are inescapable and incredibly important, particularly where investment properties are involved. Even if your rental property is negatively geared, it is still classed as part of your income and so you need to get your tax in on time and include all earnings and expenditure related to your investment.
How tax helps investors
There are a number of ways that tax comes into play where investments are concerned and offer the possibility of claiming back some of the expenses. Immediate deductions are items such as the interest charged on your home loan, rates, body corporate fees, insurances, rental property managers‘ fees, bank fees, cleaning and repairs, amongst others. These items can be claimed at tax time in the period they occur.
There are other ways that you can claim tax on rental properties, such as when the value of your investment depreciates. You are entitled to claim a deduction that will be a percentage of the cost of the property. Over time, you can also claim borrowing costs such as establishment fees, the fees for a mortgage broker if you had one, loan registration and title search costs. These can all be deducted over a five-year timeframe.
Getting good advice
Good advice is vital at any time regarding property investments, but particularly where tax is concerned, and especially if you miss the tax deadline. If you have missed it or are missing any documentation regarding your investment, you can easily contact your property manager to obtain this information.
The first step is to contact a professional tax agent to get good advice. You may then need to contact the tax office or they will contact the office on your behalf and request an extension. You should be aware that if your tax return is submitted late then you may be issued with a penalty and if you are due to pay money to the tax office then interest can be charged on the amount you owe.
Protect yourself in future
The best way to avoid any extra stress involved with tax returns is to be prepared. Ensure that you are ready next time by having all the appropriate paperwork prepared ahead of time and talk to your property manager about what information they will provide to you.
If you would like to talk to a property management professional about taxes for investment owners or simply sign your property up with an incredibly competent team, call 07 3843 4511.