Pilbara News - - Lifestyle - Hay­den Groves Hay­den Groves is the pres­i­dent of the Real Es­tate In­sti­tute of Western Aus­tralia.

The start of a new fi­nan­cial year means one thing to most peo­ple — tax time.

If you’re an in­vestor who rents out your prop­erty, it’s im­por­tant to gather all records, ex­penses and pa­per­work in prepa­ra­tion for do­ing your tax re­turn.

Keep a good record

Be dili­gent with keep­ing records from when you first pur­chase the in­vest­ment.

Your prop­erty man­ager can as­sist by pro­vid­ing fi­nan­cial year state­ments. You’ll need proof of all your ex­penses so you can claim ev­ery­thing you’re en­ti­tled to. If, through­out the year, you’ve car­ried out any main­te­nance or made any im­prove­ments to the prop­erty you’ll need to pro­vide ev­i­dence.

It’s vi­tal that records are kept for a min­i­mum of five years and, in some cases, for at least five years af­ter the prop­erty is sold.

Rent pay­ments

In your tax re­turn you must in­clude the full amount of rent and other rental-re­lated in­come you re­ceive, re­gard­less of it be­ing paid to you di­rect or to your prop­erty man­ager.

In ad­di­tion to reg­u­lar rent pay­ments, rental in­come can in­clude rental bond money you were en­ti­tled to re­tain, let­ting and book­ing fees you re­ceive, and any in­sur­ance claims that were paid.


De­duc­tions can be made on things like man­age­ment and main­te­nance costs, which can be claimed im­me­di­ately, bor­row­ing ex­penses, de­pre­ci­a­tion and cap­i­tal works spend­ing, which are usu­ally de­ducted over sev­eral years. The im­por­tant thing to re­mem­ber is that the de­duc­tions can only be claimed if the prop­erty is be­ing rented out or is gen­uinely avail­able for rent.

Be­ing avail­able to rent means the pe­riod that the prop­erty is ad­ver­tised for rent and re­ceiv­ing wide­spread ex­po­sure to po­ten­tial ten­ants.

Cap­i­tal gains tax

If you’ve sold your in­vest­ment prop­erty or house in that past fi­nan­cial year, any cap­i­tal gain made on the prop­erty will be sub­ject to cap­i­tal gains tax. In this case, you’ll need to re­fer to records of the date and costs of buy­ing the prop­erty so you can work out any cap­i­tal gain, or loss, when you sell it.

If you’re an in­vestor or if you’re think­ing of in­vest­ing, you can find more in­for­ma­tion about prop­erty tax on the Aus­tralian Tax­a­tion Of­fice web­site or from your reg­is­tered tax agent.

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