We’re now into the last quarter of the 2022/23 financial year, which means it’s getting close to tax time. 

The best tax tip for landlords is not to leave your tax planning until the last minute – and certainly not until 30 June. On this basis, here are a few steps landlords can take to get ready for tax time: 

1. Organise rental income and expenses: Keep track of rent received and all expenses related to the rental property (e.g., repairs, maintenance, property taxes, insurance, etc.). 
2. Understand tax deductions: Familiarise yourself with tax deductions you may be eligible for, such as depreciation expenses, mortgage interest, and property taxes. 
3. Organise your records:Maintain good records of all rental income and expenses throughout the year, including receipts and invoices. 
4. Enlist professional help:Consider hiring a tax professional or accountant to assist with tax preparation and ensure all applicable deductions and credits are claimed. 
5. Review tax laws and regulations: Fortunately, having a Raine & Horne Property Manager will be very handy here. Your property manager will stay current with changes in tenancy laws and regulations that may impact your investment. Better still, property management fees are also tax deductible.
6. Get a depreciation schedule: Investment property owners can significantly benefit from having a depreciation schedule prepared for their properties.

Depreciation is the gradual reduction in value of an asset such as an investment property over time due to wear and tear, and the ATO allows property investors to claim this loss of value as a tax deduction.

A depreciation schedule is a detailed report that outlines the items in an investment property that are eligible to be claimed as a tax deduction. This includes wear and tear to the building structure, fixtures, and fittings. Depreciation schedules can be prepared by quantity surveyors or specialist companies such as BMT. These schedules are also tax deductible.

There are several benefits of having a depreciation schedule including identifying all eligible deductions for the current financial year and up to 40 years into the future. This can help property owners reduce their taxable income, resulting in significant tax savings.

Moreover, claiming depreciation deductions can result in significant cash flow benefits for landlords. Additional tax savings from depreciation deductions can mean more money to reinvest or cover expenses.

Your accountant can answer all your questions about ways to maximise the ongoing tax benefits associated with owning a quality, well-located investment property.