Tips for tax time

1. Capital gains. Capital gains need to be managed. Remember that gains generated during the year can be minimised by offsetting them against capital losses or trading losses incurred during the same year. If you are going to sell an investment property, it is wise to plan the sale so that capital gains are generated in the sale year that you sell any assets which may have lost value. And don’t forget the 50% discount on capital gains where an asset is held for longer than 12 months.
2. Depreciation. Don’t forget that under normal circumstances, only registered quantity surveyors are authorised to prepare depreciation schedules.
3. Documentation. Make sure you get a statement of all your rental income and expenses from your Property Manager.
4. Interest. Be sure to only claim interest expenses on funds that are used for investment. This means that the purpose of the loan is crucial, not necessarily the security you used.

5. Pre-pay expenses. If your investment is geared, it is often worth considering pre-paying next year’s interest, insurance or rates to gain an immediate tax deduction.

1. Travel. Any costs associated with inspecting your investment property are normally tax deductible, including travel, so be sure to document these.

But please remember, our advice is always to get the advice of a qualified tax advisor in these matters so you don’t have to worry about making expensive mistakes.