Rental Property Tax Return
Rental property checklist
Missing out on any deduction is a thing of the past let us assist you in gathering all the documentation you need for your Rental Investment property.
Whether you recently bought your new investment property or you have had the same rental property for years, we always suggest that maximising your deductions is best if you are negative gearing. Most of our clients have positive cash flow for budget purposes and for tax purposes is negatively geared meaning that you receive a refund for the property in question.
Most clients will usually have a real estate agent managing the rental property, if this is you, all we request is that you retrieve the rental profit and loss statement for the year, this statement usually will list all the deductions that was paid by the managing real estate agent, which makes it easier for you as the landlord to manage, if this is the case then you only really need to provide a few more pieces of information like bank statements for interest paid to the bank, borrowing costs that you may have paid can be claimed over a five year period, a depreciation schedule will assist you in achieving a greater deduction for the investment property over the life of the investment property, if at any stage you move back into the property, please ensure you record the dates if moving in and out of the property that when you make it your primary residence, because this will impact your capital gains results at the end of it useful life or the day you sell it, or the day your beneficiaries bequeath it. These events usually will trigger a capital gains tax, you can check out more about capital gains tax here.
There are many documents that you may need to provide to claim the maximum deductions for your investment or rental property, some of the documents are listed as any advertising created to attract tenants, body corporate or strata fees, borrowing expenses when you initially set up the loan, amortised over five years, any cleaning costs indoors or externally to the property, council rates usually four quarters per year, a depreciation schedule will assist you supercharge your expenses over the life of the asset, if you are planning on renovating, wait until this event occurs first before bringing out a depreciation specialists or you can create the depreciation schedule now and when and if you do renovate in the future you can always update and grab a new one it’s in your best interest, if you have an outside garden any gardening pruning or lawn mowing costs can be claimed, Landlords Insurance, any interest on loans borrowed to attain the investment property, land tax applicable especially if you have more than one property in each state, any legal fees occurred due to a tenants falling out or bond claim, no initial legal fees can be claimed these usually form the cost basis of the property for capital gains tax purposes, pest control for vermin and other pests, if you have a real estate agent that manages the investment property you can claim their costs, or if you have Airbnb rent out your property you can claim their fees. Repairs and maintenance for any works for breakdowns, you are not allowed to claim a deduction to repairs if you are upgrading the property, these are usually depreciated over time, when you eventually receive your depreciation report this will also have a special building write off over the life of the asset in this case the investment property. You can claim any stationary, telephone postage photocopying that you needed to maintain the property, the basic water charges can also be claimed, in the event that your property is on a fixed meter under strata for your electricity meter or water meter and you the landlord pays for this expense you may also claim this expense. There may be other expenses that you may incur in the running of the property, you can run these expenses by us and we will advise what you can and can’t claim.
For a full list of comprehensive spreadsheet, please add your details below and we will send you a spreadsheet to maintain your expenses for the full financial year.
Depending on how new the property is or how much you have borrowed from the bank, these factors will determine how high your tax refund will be, with newer properties there is higher depreciation, the more you borrow, the more the tax losses you will suffer, which means higher tax refunds, please note that you need to have paid taxes to receive any refund.
Unfortunately borrowing costs are amortized over a five-year period and can not be tax deductible in one hit.
You technically don’t need a tax depreciation schedule, however if you want to claim the maximum amount of expenses for the depreciating items it will be in your best interest to get on, Australia Wide Tax Solutions has an arrangement where by you can have one for $595 for any property Australia Wide.