Organised documentation ensures financial gains and adherence to tax requirements. Embracing a business-like approach from the outset is key, including understanding deductible expenses and declaring rental-related income.
A competent property manager is indispensable in maintaining accurate records. They manage more than just your property; they enhance its value and maximise rental income. They provide monthly summaries of all financial transactions, aiding in precise record keeping. Alongside a property-specialised tax accountant, they form an essential part of your investment strategy.
Initial efforts in setting up a comprehensive record-keeping system pay off in the long run. Utilise spreadsheets or professional software to track every investment-related transaction. This setup is crucial for claiming maximum allowable expenses.
The Australian Taxation Office (ATO) advises maintaining backups of all digital records, with paper copies as a supplementary option. Required to be kept for five years, these records are vital for accurate capital gains or loss calculations, ensuring you don't overpay on taxes. Documentation must be in English or easily translatable, and for investors with multiple properties, maintaining separate, organised records for each is crucial.
Landlords can claim a variety of expenses, from advertising to land tax, maintenance, insurance, and agent fees. Proportionate deductions for home office expenses are also possible. Utilising professional bookkeeping services can be beneficial and is a deductible expense.
Rental Income: Preserve all records from property managers, bank transactions, and bond documentation.
Rental Expenses: Document interest on loans, land tax, depreciating assets, and renovation evidence.
Purchase Records: From the moment of deciding to buy, keep contracts, conveyancing, and loan documents.
Ownership Records: Maintain documentation of personal use, tenant leases, refinancing, and expenses.
Sale Records: When selling, retain sale contracts, conveyancing documents, and capital gain or loss records.
Navigating the complexities of property investment and tax record keeping can be daunting. At LJ Hooker Property Partners, we understand these challenges and are committed to providing you with the expertise and support you need to make your investment journey successful and stress-free. Reach out to us today for personalised assistance and expert guidance.