Hey guys just started out in the world with a small IP and keen to start folders on it.
I have most of them sorted out but for tax i am wondering if anyone has like a list of the types of things that you can claim back on tax for an IP. Any replies muchly appreciated. Thanks
Wade
Hi Wade,
Recommend you visit the ATO website and do a search for rental properties – the document is downloadable.
This will provided you with all the information you require.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958I suggest you keep a “Master File” on each property that records Purchase details, Legal Papers, and Capital Gains tax records etc.
Then each year have an annual tax file to give to your Accountant which should have details for Income (rent) Expenses (Advertising, bank charges, PM fees, electricity, body corporate fees, rates, land tax, repairs,Insurance,Interest on borrowings and capital improvements.etc)
Be carefull with repairs. You can only claim repairs to the property caused by it being rented and restored to its condition when you purchased. If you’re not sure give as much detail to your Accountant as possible and let them decide.Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”Amanda’s idea is exactly what I do. I file anything spent on our IPs straight into the folder and give our accountant a summary of what we have done with that property over the year. I list the income received, interest paid and a breakdown of what we spent, ie. replace plumbing $xx, dumped old fans, new fans cost $xx, electrician fee $xx. This gives the accountant a chance to write off anything as well.
The accountant sorts out what is a repair and what is capital expenditure. Anything that doesn’t fit into one house goes into a general 2005/2006 tax file which I sort up at tax time.
My mum has a spreadsheet for each property but I have never gone down that path (not enough properties to bother setting it up).
One tip my mum passed on which I love is that in the rental receipt book I draw a line from corner to corner of the page where I have taken the rent to (ie. rental may have been for the week 26 June to 2 July) and write across that particular receipt “2004/2005 year inclusive”. Otherwise next year it is impossible to remember whether the broken week was taken into the previous year’s rental income or left to be taken into the next financial year’s income.
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