Sydney Accountant Warns Landlords To Keep Up To Date

By Author: Ian Comnys
Total Articles: 39
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Investment property owners are risking paying more tax than they need to by not being aware of the tax considerations they can claim, Principal and Chartered Accountant at Fletcher Tax Janna Fikh says.

Fikh, who was giving tips to the clients of inner-west property management firm Exchange Property Sales and Management, says that there are five key tax considerations that every investment property owner needs to know when it comes to tax time.

1. The difference between capital and non-capital repairs

Many landlords spend thousands of dollars on repairs for their property without realizing it may not equate to a deduction when tax time comes, Fikh warns.

“Landlords are only able to deduct the expense of repairs to their property when they are classified as ‘non-capital’ repairs, which are general repairs and regular maintenance for the property,” she says.

No deductions are available for repairs that are undertaken to improve or extend the normal economic life of an existing structure. The expenses from these repairs ...
... will be added to the cost of the property. Knowing the difference between the two can save landlords a lot of money in the long run.

2. Landlord insurance

Fikh advises that every landlord should take out landlord protection insurance to cover their investment property.

Landlord protection insurance covers some particular risks associated with renting out a property that may not be covered by a typical home and contents insurance policy, such as damage by tenants and non-payment of rent.

“Landlord insurance is imperative to ensure peace of mind and gives a landlord backing in case anything goes wrong with the property,” she says. “It is also tax deductible.”

3. Have the property surveyed

If a building or house is relatively new, Fikh recommends that a quality surveyor should inspect the property.

“Many landlords probably don’t know how to value a property themselves and could potentially lose out on a whole mountain of deductions they could otherwise legitimately take advantage of,” she says.

4. Determine when the property is deemed available for rent

It’s important that a landlord knows when their property is deemed available to rent by the tax office.

“Deductions are only available when the property is available for rent per tax office terms,” Fikh says.

The tax office deems a property to be available for rent when there is an agreement set up with an agent, or when a landlord has started advertising the property.

If a landlord starts repairs before the property is deemed available for rent they will not be able to claim deductions for those repairs, which wastes a lot of money.

5. Get a free trip!

Own a gorgeous investment property in southern Queensland that you haven’t seen for awhile?

Many investment property owners don’t realise that travelling to inspect their rental property is tax deductible.

While deductions are proportionate to the private part of their trip, a landlord can still claim their airfares, hotel bills, meals and other expenses.

The above applies regardless of whether a property is five hours away, interstate or overseas. Plan the trip carefully and mix business with pleasure!

For more information about managing an investment property, download Exchange Property’s FREE Landlord Management Kit from their website today.

About Exchange Property Sales and Management

Exchange Property is a boutique property sales and management firm based in Sydney’s inner west. The directors of the company promise a serious approach to both real estate sales and property management.

When it comes to property management this means that they have processes that cover the key areas of property management:

• How they manage tenants
• How they manage money
• How they manage maintenance
• How they assist with tax
• How they help you grow the value of your property and portfolio

Their free Property Management Guide explains their process and their Investor Handbook gives some good advice on growing your property investment portfolio.

For further information about Exchange Property Sales and Management, please call (02) 9146 5324 or visit their website: www.exchange-property.com.au