The end of the financial year is one of the most important times for property investors with the arrival of tax season.

The end of the financial year always comes around too quickly, and is often a period of added stress, from preparing your own personal tax return to an increase in workload for your business. But what often gets neglected is what you need to do for your property investments come the EOFY.

Here are a few tips and boxes you need to tick to ensure all is taken care of when it comes to your investment property and tax documents.

Document all ingoings and outgoings

The most crucial thing when it comes to your investment property and tax is knowing exactly where you stand from a financial point of view (money that has come into to the property and money that has gone out).

The obvious and easiest way to do this is to keep a record of all invoices, rates notices, bank statements, insurance documents, and receipts associated with the investment property. This will give you a clear indication of exactly where you stand over the financial year.

You can claim improvements to your investment property

If you have made any changes or improvements to the rental property, you can most likely make a claim on those improvements and the money you have spent on them. Whether it is repainting or fixing a leaking roof, all you need to do is have a detailed list of all the works that have been carried out, as well as the expenses and invoices to show to the tax department.

What about major works?

You can claim expenses spent on minor works to your investment property, which is essentially maintenance, repairs, and anything that enables you to keep the property up and running.

Major works are treated differently by the tax system, and not all changes or improvements to a home, even if they are made when the home is being leased out, can be fully claimed. Some of these works might only be partially deductible, or need to be depreciated and claimed over their effective life.

What about compliance works?

Yes, of course! Anything that relates to the compliance of your investment property, be it changing a smoke detector or replacing a failing heating system, can be claimed.

Don’t forget about agent fees!

Any management fees that relate to your investment property can also be claimed. It is a great to idea have an NDA financial statement prepared by your real estate agent, so that you have everything listed there for your accountant ready to do their work. Any accountant fees related to your investment property are also claimable, as are insurance premiums and any bank interest you’ve paid on mortgages on investment properties.

Finally, you’ll need a depreciation schedule

Arguably the most important document of all when it comes to tax and your investment property is the depreciation schedule, which is a comprehensive report that outlines all the costs and asset values of the property, as well as their depreciation over the period of time. The report should include assessments on the properties ageing and general wear and tear, and should be carried out by a qualified quantity surveyor.

Still need more help?

The amazing property management teams at Barry Plant Maryborough are here to answer any questions you have about tax time and your investment property. Don’t hesitate to call us, email, or just pop in to one of our offices and have a chat.

You can also listen to the The Property Podcast with Cameron Webb and Gaile Atkinson on Spotify, with the latest episode covering everything about tax time and investment properties. Click here to listen to the latest episode.