Your management agent will normally provide a monthly and annual statement. The annual bank statement should show a summary of interest expense. A specialist property accountant can assist by ensuring all allowable tax deductions are made.
TIP 2 - Depreciation:
Only registered quantity surveyors & tax agents are authorised to prepare depreciation schedules. They can produce a scrapping schedule, which puts a value against all items to be thrown away. This value is expensed in the year of expenditure. The new items are then depreciated with a new depreciation schedule.
TIP 3 - Travel:
All your costs to inspect your investment property are tax deductible, including travel. Ensure you apportion any personal component.
TIP 4 - Interest expenses:
Only interest expenses on borrowed funds used to invest are deductible. A split loan should be considered when a loan is used for both investment and private purposes.
TIP 5 - Trusts:
The use of a trust can be a major benefit to property investors by improving asset protection, estate planning and increasing flexibility
TIP 6 - Pre-pay expenses:
If you have a geared investment it is worth considering pre-paying next year's interest to gain an immediate tax deduction such as insurance premiums, rates, levies or possibly even interest.
TIP 7 - Manage capital gains:
Capital gains generated during the year can be minimised by offsetting it against capital losses or trading losses incurred during the same year. The 50% discount on capital gains is available where an asset is held for longer than 12 months.
TIP 8 - Manage capital losses:
Capital losses incurred in any year are available to be carried forward for an indefinite period.
TIP 9 - PAYG variation:
Where you have negatively geared rental investments, the negative part offsets against your other income.