It’s almost the end of another financial year, and there is still time left to get your finances in order and maximise your tax refund on your investment property.
There are significant steps that you can take now to help maximise your refund for the current year, and set you up for the new financial year ahead.
At Mortgage Choice North Perth we find that there are 3 common areas where people don’t realise they can claim in relation to their investment property.
1) Claim your expenses
Many Perth property investors overlook the fact that they can claim on a range of expenses associated with their investment property. The typical items that you might be able to claim are;
body corporate fees,
capital expenses, and
building maintenance and repairs
Also, don’t forget that things such as council water rates and the cost of travel to and from the property for inspections can also be included as deductions.
2) Prepay interest on your loan
If you have borrowed for your investment property, and you have a fixed interest only loan, you may be able to prepay the annual interest on the loan.
You can claim up to 12 months of prepaid interest on an investment loan, which can be pretty handy if you want to reduce your net income in this financial year.
This strategy can be particularly great if your income for the year looks like it will be more than usual, and it can also give you peace of mind for the year ahead knowing that all, or part, of the yearly interest repayments are already taken care of.
3) Don’t miss out on depreciation
Make sure you aren’t part of the 80% of investors that miss out on taking advantage of property depreciation.
Many investors often assume their property is too old to benefit from depreciation, especially if the property is in one of the older Perth suburbs. However there are still items that you may be eligible to claim, such as;
Hot water units
Air conditioning units
Light fixtures, and
While there are many other aspects to consider when claiming depreciation such as the use of the item, fit out and age of the property, all of the items can quickly add up.
If you want to be sure that you haven’t missed anything and have maximised your deductions it is best to contact a quantity surveyor to have a tax depreciation schedule prepared.
Having this on hand will also save your accountant time preparing your tax return, and in turn you should save some money on the accounting fees.
The most important thing to remember is that everyone’s personal situation is different, and you should consult an accountant or financial advisor to make sure that you are on the right path.
Want more information?
For more information on how you can save on your home or car loan at the end of the financial year call Peter Hale at Mortgage Choice North Perth on 0402 252 150 or email email@example.com.
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