How to Get Your Investment Property Ready for the New Financial Year

As a property investor, the beginning of a new financial year is a prime moment to take a step back, assess your investment strategy, and make sure everything is in order. This article breaks down the process into simple steps to help you get ready for the year ahead.

Maximise Your Deductions

As a property investor, there are deductions you can claim that help you keep more money in your pocket during tax time. These deductions can reduce the amount of your income that gets taxed. It's like finding extra money you didn't know you had.

Here's a few deductions you might be able to claim (remember, deductions only count if there is a clear connection to your investment property):

1. Advertising Fees
2. Body Corporate
3. Repairs and maintenance (restore or repair to it’s original condition)
4. Utilities
5. Interest repayments
6. Pest control
7. Travel
8. Water costs

Keep your Receipts & Invoices

Keeping good records is crucial for claiming deductions. You should track all the income and expenses related to your property. This includes things like rental income, mortgage payments (interest is the vital piece here), insurance, repairs, and any other costs connected to your property.

Pay for Expenses Before 30 June

To optimise your deductions, make sure to pay your expenses before the 30th of June. These expenses may cover repairs, maintenance, insurance, interest, and ongoing costs. By settling these payments before the close of the financial year, you can include them in your tax return for the financial year.

Know Your Tax Deadlines

Being aware of the key tax dates is crucial. These dates will guide you through the year:

• 15 May: If you're working with an accountant like LINK Advisors, they will reach out prior to the due date of your individual tax return. If communication is limited, be sure to contact your accountant to get your return done by 15 May.
• 30 June: This is the end of the financial year. It's the last chance to pay expenses and include them in this year's tax return.
• 31 October: This is the date for any individuals that are not on a Tax Agents Lodgement List.

Talk to an Accountant

Doing your own taxes can be confusing, especially when you're dealing with investment properties. That's where an accountant can come in handy. They are experts in tax laws and can guide you through the process. They can also help you make sure you're claiming all the deductions you're entitled to.

Plan for Future Growth

Beyond the immediate tasks of preparing for the new financial year, it's wise to consider your long-term goals. Take this opportunity to reflect on your investment strategy. Are there any changes you want to make? Are there areas where you can improve? By setting clear goals and planning for future growth, you can ensure that your investment property continues to provide you with financial benefits in the years to come. Whether it's expanding your portfolio or optimising your property management, a well-thought-out plan can set you on the path to even greater success.

Make the Most of Depreciation

Depreciation simply means things lose value over time. The good news is, the tax office lets you claim this loss of value as a deduction. There are two types of depreciation:

• Capital Works (Division 43) Deductions: This is the date for any individuals that are not on a Tax Agents Lodgement List.
• Plant and Equipment (Division 40) Depreciation: This covers things like easily removable items.

By claiming depreciation, you can lower your taxable income and potentially get a bigger refund. With this, the best place to obtain a report detailing your depreciation deductions available is through a Quantity Surveyor.

In conclusion, gearing up your investment property for the new financial year doesn't have to be overwhelming. By adhering to these straightforward steps, you're not only setting yourself up for a smoother tax season but also maximising the potential returns from your property investment. Remember, staying organised, being aware of important dates, and leveraging the expertise of professionals like LINK Advisors can make a significant difference in your tax result at the end of the year.