Make the most of in­vest­ment

Whitsunday Times - - REAL ESTATE -

FOR those prop­erty in­vestors who haven’t yet given their tax re­turn much thought, now is the per­fect time to get a bet­ter un­der­stand­ing of how you can best pre­pare to lodge your re­turn this year, says Mort­gage Choice.

Of course, ev­ery dol­lar you can claim on your in­vest­ment prop­erty will ben­e­fit your over­all fi­nan­cial well­be­ing, so it is im­por­tant to take proac­tive steps now to en­sure you’ll be in the best po­si­tion pos­si­ble when lodg­ing your re­turn.

While as a prop­erty in­vestor you are privy to a range of spe­cialised tax breaks, there are also a lot of things that you may not have re­alised you could claim.

For in­stance, you may be able to claim a range of ex­penses, in­clud­ing agents’ fees ad­ver­tis­ing body cor­po­rate fees cap­i­tal ex­penses build­ing main­te­nance and re­pairs clean­ing in­surances home loan fees and in­ter­est pay­ments. Don’t for­get coun­cil and wa­ter rates, plus the cost of travel to and from the prop­erty for in­spec­tions can also be claimed. De­pre­ci­a­tion de­duc­tions An­other as­pect that of­ten gets over­looked when lodg­ing a tax re­turn is de­pre­ci­a­tion de­duc­tions.

De­pre­ci­a­tion ap­plies to new and ex­ist­ing res­i­den­tial prop­er­ties and in most cases own­ers of an in­vest­ment prop­erty or prop­er­ties are likely to be able to claim some­thing.

It re­lates to the de­cline in value of items in­side a prop­erty and some­times ap­plies to the struc­ture of the prop­erty it­self.

Claims can also be made for items that may fall in value over time, such as fix­tures and fit­tings, floor cov­er­ings, ap­pli­ances and built-in wardrobes.

If you own an in­vest­ment prop­erty in a strata build­ing, it is a good idea to keep in mind that you may be able to claim de­pre­ci­a­tion on a por­tion of the value of items and equip­ment in com­mon ar­eas, such as car­pets and fur­ni­ture in foyer ar­eas. A loan struc­ture to max­imise your tax de­duc­tions One of the most com­mon mis­takes in­vestors make is bundling all their prop­er­ties un­der the one loan and not clearly defin­ing what per­cent­age of their loan funds each prop­erty.

In other words, if your owner-oc­cu­pied prop­erty is funded via the same mort­gage as your rental prop­erty, it is im­por­tant for you to clearly state ex­actly what por­tion of your loan is re­lated to your ex­ist­ing owner oc­cu­pied prop­erty and what por­tion is re­lated to your in­vest­ment prop­erty.

Hav­ing a clear sep­a­ra­tion will help you at tax time as you will be able to work out what pro­por­tion of the in­ter­est can be claimed as an ex­pense against your rental in­come. With so much to con­sider, pre­par­ing your tax re­turn as a prop­erty in­vestor can seem a touch over­whelm­ing.

It is for this rea­son that it is so im­por­tant to deal with a pro­fes­sional.

An ac­coun­tant will be able to help you iden­tify ex­actly what you can and can­not claim and what can be writ­ten off down the track.

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