Newspaper article The Northern Star (Lismore, Australia)

Investors: Get All Your Deductions; the Australian Tax Office Simplifies Investors' Claims

Newspaper article The Northern Star (Lismore, Australia)

Investors: Get All Your Deductions; the Australian Tax Office Simplifies Investors' Claims

Article excerpt

AS WE embark on the beginning of 2014 financial year, it's time for Australia's $1.8 million property investors to get their affairs in order.

If your rental property requires any repairs or maintenance work, it's a good time to set up a plan so that you can claim the relevant deductions in this income year.

In order to maximise your deductions, the most important thing you have to do is keep good records.

You don't have to be super organised with this.

Over the year, put every receipt into a box and hand it to your accountant after June 30. Pretty simple.

If you've lost some receipts, but you paid with a credit card or EFTPOS, the tax office will accept bank statements for individual tax payers as proof of purchase, so make sure you scour them at year's end for any expenses you don't have separate receipts for.

Investors really need professional advice to ensure they don't make mistakes.

In 2012, about 110,000 landlords made incorrect claims on their tax returns and the tax office has just sent letters to all of them.

The ATO has their eye on property investors, following a surge in deductions claims in recent years, as more investors switch to property over shares post-GFC.

Don't muck around with the ATO.

The truth is, our tax system is extremely generous in supporting property investors, so take advantage of this but don't make bogus claims.

There are so many small things you can claim for that many investors miss.

The ATO has provided a comprehensive list of immediately deductible expenses - here it is.

Advertising for tenants

Bank charges

Normal body corporate fees

Cleaning costs

Council rates

Gardening and lawn mowing

Insurances - building, contents, public liability

Interest on loans

Land tax

Lease document expenses - preparation, registration, stamp duty

Some legal expenses

Pest control

Property agents' fees and commissions

Quantity surveyors' fees

Some repairs and maintenance costs

Bookkeeping fees

Servicing costs - eg service to a water heater

Stationery and postage

Telephone calls

Tax-related expenses

Travel and car expenses

Water charges

There are a few things not widely understood by investors. …

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