Eight tips for property investors to maximise their end-of-financial-year tax returns

As the end of financial year fast approaches, there are a number of tax and other benefits that can be associated with owning an investment property. 

1. Get the facts

Regular and concise information is imperative to the smooth management of your investment, particularly during the leasing process. A good property manager should provide you with detailed reports about the performance of your property. To that end, annual income and expenditure statements should be provided along with monthly rental  statements.

2. Prepay expenses

In most cases for investors, the best way for to boost your property investment refund is to pay for any expenses before June 30 – that way you can claim these expenses as a tax deduction in the 2012 financial year. Typical expenses include rates, body corporate fees, borrowing costs, property management costs and insurance. If you have a high income you may even consider bringing forward required spending such as repairs. This can help you to reduce your overall tax bill. 

3. Know your personal tax position

Before you lodge any expenses it’s important that you consider your tax position carefully. For example, if you have multiple investment properties that are negatively geared (the rental income is less than the expenses of the property), the negative amount could be offset against other income including salary. 

4. Obtain a quantity surveyor’s report

Deprecation refers to a value assigned to the wear and tear of a property of equipment. You can claim a tax deduction for wear and tear without spending any additional money. To ensure you get the maximum deduction commission a quantity surveyor’s report on your investment property.

5. Pay up superannuation

If you are self-employed or employed by your own company, paying into your superannuation before the end of the financial year can be an effective way to minimise tax.

6. Cash is king

Lodging your tax as early as possible will help ensure your receive your refund sooner, therefore resulting in a boost to your cashflow.

7. Engage an expert

To get the most out of your return we recommend investing in an accountant who specialises in property investment.

8. Plan for the year ahead

Now you have done all the hard work why not take the time to sit down with a property advisor and plan the year ahead. Are their opportunities to build your portfolio? Could a renovation help you achieve a higher rental income?

Cameron Deal is the founder of Melbourne buyer advocate and property advisory company Infolio Property Advisory 

For more end-of-financial-year tax strategies, download our free eBook.