Don't leave tax time until the last minute

29-May-2014

Can you believe it? we are drawing close to the end of a financial year again!

Instead of waiting until June or July to pass on some useful tax information we are getting in early with some ideas and advice for plans you can put into action now to ensure you are maximising your investment once it comes to June 30.

While deductible expenses differ in some cases for private landlords, professionally managed properties qualify for a specific list of deductible expenses according to the Australian Taxation Office (ATO).

While any fees are relating to professional management are fully deductible for these landlords, the full cost of a trip to visit an investment property once a year is also fully deductible, providing the inspection was the only purpose for the trip - generally, airfares and one night's accommodation would be considered reasonable.

If the inspection is combined with a holiday or other travel, the expense would need to be apportioned accordingly. If the inspection is secondary to the holiday, the travel expenses are not deductible at all, however a portion of the accommodation and any other expenses directly relating to the inspection would be allowed. For properties closer range, the cost of driving to and from the property is deductible and calculated on a per kilometre basis according to the type of vehicle. 

Another area often underestimated by landlords is depreciation, which the vast majority of investors failing to take full advantage of the allowable deductions.

For just a few hundred dollars, a full depreciation schedule can be prepared by a quantity surveyor that will detail the landlord's full entitlements. Claims can be back-dated for up to two years, which an generate significant tax savings for most landlord's.

Repairs and maintenance are other categories to carefully consider at this time of year. With the full cost of any repairs and maintenance fully deductible, it's an ideal time to schedule regular maintenance like pest control, cleaning of gutters, servicing of air-conditioners and any other general repairs the property may require. Payment of any expenses are allowable too, including interest on fixed loans or other fixed fees.

Of course, any general advice is only that - to ensure deductions are maximised, tailored advice can be sought from a qualified tax accountant.