Tax Tips 2023: Property Investors
Property investors, now is the time to gather your records and review your expenses for the 2023 financial year.
Income to Declare
All income earned from each property must be declared. If you have multiple properties, keep the records for each property separate to make the tax return more efficient.
- Rent received; whether paid directly to you, through an agent, or an online management platform. Rent includes regular recurring amounts and any lump sum amounts paid in advance.
- Rental bonds returned; for example, if the tenant caused damage or defaulted on rent payment.
- Insurance payouts; received as compensation.
- Expenses reimbursed by the tenant; for example, if they have caused damage and you have paid for the cost of fixing the damages, or if they have reimbursed you for water.
- Extra fees received; for example, letting or booking fees.
- Government rebates; for example, for the installation of solar utilities.
You will need statements or recipient-created tax invoices from agents or management platforms and documents for all other payments received.
Tax Deductions
Deductible expenses for the property are different for residential and commercial properties. Not all expenses related to owning a property are allowed as deductions, so it’s important to check what you can claim.
Expenses You May be Able to Claim This Year
- Advertising for tenants
- Body corporate fees
- Council rates
- Water supply charges
- Land tax
- Cleaning, gardening, pest control, and property maintenance
- Insurance
- Agent fees
- Repairs and maintenance
- Some legal expenses
- Loan interest
Other Expenses
Some expenses need to be claimed over a more extended period, such as several years or decades. These may include borrowing expenses, capital expenditure, depreciation, initial repairs, and capital works.
Some expenses cannot be claimed. These include stamp duty, loans and repayments, some legal expenses and insurance premiums.
Get Help to Simplify Your Property Records
Tax matters for property investors can be complex. The ATO keeps a close eye on tax returns that involve property investment, as it’s easy to make mistakes. Other matters to consider include the period of rental availability, private use of the property, capital gains tax, legal contracts, and positive or negative gearing.
We’d love to help ensure you claim the right deductions to make the most of your investment property this year and beyond.
Book a time now for your 2023 tax return.