Property investor EOFY checklist
As the end of the financial year looms, property investors should start to review their last 12 months and assemble their paperwork for tax time. There’s a lot to work through, but it shouldn’t be stressful.
Follow this checklist and you’ll be sitting back waiting for your return before you know it.
Gather your paperwork
As early as possible, start collating all expenditure receipts relating to your property. This should start in early June at the latest.
If you’ve held the property for more than a year, refer to previous tax returns so nothing is missed. You can create a template for yourself that makes this process easier on repeat.
Know what you can claim
The ATO Residential Rental Properties website has a summary of what you can claim at tax time. It includes; water and council rates, interest on funds relating to the property, insurances, property management fees, ongoing expenses, capital works and depreciation. Some of these are deductible immediately, others over years.
Double check you are claiming correctly (your accountant should help you manage this).
Pay expenses early
If you have current or forthcoming expenses for your property (such as small maintenance requests), consider paying them prior to June 30. This will allow you to offset your rental income and maximise any negative gearing.
You may also be able to pre-pay next year’s insurance premiums – ask your accountant for advice.
Double check your policies
The turn of the financial year is the time to get a policy check-up. Go through your paperwork and make sure that all your policies (e.g. landlord insurance, building insurance) are up-to-date and in order.
If you have any questions about the fine print, speak to the insurance providers before July 1.
Review your deals
Review your loans to make sure any interest only periods are not coming up for expiry, especially if you have a loan on your owner-occupied property.
Shop around and review your loan and insurance products against others in the market to ensure you’re getting a good deal.
If you’re selling… hang tight
If your investment property is on the market, you’ll likely want to wait until after July 1 to ink the deal. If your contract is on or before June 30, you’ll need to pay your capital gains tax sooner rather than later.
If you can wait till the following EOFY, you’ll create extra breathing room that might come in handy. Discuss the best approach with your accountant.
Forecast your plans
EOFY is the ideal time to look ahead. Consider your plans for your investment property for the next 12 months. Are you thinking about selling? Buying another property?
Speak to your accountant about the tax implications of your planning and ensure you’re fully informed before taking any action.