Tax Time for Property Investors: What You Need to Know

It is tax time for property investors around Australia. This time of the year can often feel overwhelming for investors as they try to organise all of the relevant income and cost information, they need to send to the ATO. Even with the help of a registered tax agent, accidental mistakes and oversights can still sneak through on your tax return, with costly results.

The ATO have released some useful resources to help Australian property investors get their bookkeeping correct so they can benefit from the tax deductions afforded to investors. At Property Club, we find it important to inform our members of these resources while also highlighting some of the key areas that all investors need to consider for tax time in 2022.

####Make Sure to Include All Rental Income The ATO now has more access to rental income data than ever before, making it easy for them to spot any income that has been received but not declared by the property owner. Including all of your rental income in your declaration is the only way to guarantee you won’t have to make amendments to your return in the future.

Every dollar of rental income needs to be accounted for in your return. This includes:

• Rental bond money retained
• Insurance payouts
• Short-term rental arrangements
• Rental income from only part of a home

Make sure you are thorough in declaring all of the rental income you have received over the past 12 months, and your tax declaration shouldn’t encounter any issues.

####Understand What Expenses Can be Claimed As a property investor, you would have paid a series of expenses over the past year on the properties you own. While some of these expenses can be claimed straight away on your tax return, others can only be claimed over a number of years.

Expenses that can be claimed right away include:

• Council rates
• Repairs and maintenance
• Interest on loans
• Rental management fees
• Insurance premiums

Borrowing expenses and capital works – such as renovating the kitchen – need to be claimed over a number of years. Similarly, if you refinance your rental property loan to pay for private expenses like a holiday, you cannot claim the interest from the expenses on that loan as a deduction.

####ATO’s “Tax Time Toolkit for Investors” The ATO has released a comprehensive document titled “Tax Time Toolkit for Investors”. This free resource is filled with useful information to help property investors and tax agents make sure they are covering all areas and ticking every box when they prepare a tax declaration.

With handy tips on interest expenses, borrowing expenses, capital expenditure, body corporate fees, capital gains tax, and so much more, this toolkit should be consulted by every property investor to ensure they aren’t overlooking any detail during tax time.

####Property Club is Here to Help Property Investors During Tax Time Property Club helps its members maximise their returns during tax time each year. While investing in property opens up tax benefits that investors can leverage in returns, understanding these benefits isn’t always easy. That is why Club founder Kevin Young holds “Get Your Tax Back” campaigns each year to educate investors on the best way to approach their tax returns.

If you are an Australian property investor who needs help during tax time, why not become a member of Property Club today? Contact our friendly team at enquiries@propertyclub.com.au to find out more!