Get the most out of tax time
The end of the income year means that now’s the time to review your current finances and set out your goals for the next 12 months. Here are some tips to maximise tax time.
What you can and can’t claim with an investment property
Gather statements from your property manager and receipts for agent commissions and fees, insurance, body corporate levies, rates, water building work, repairs and maintenance from throughout the year. Remember, you can’t claim renovations or any maintenance that are improvements to your investment property.
If you bought or sold your investment property in the past financial year, you can claim the legal fees you paid in that sale. However, your total legal expenses for the income year, including those fees associated with the sale, must be equal to or less than $10,000. Real estate agent’s fees incurred as part of buying or selling the property are not claimable.
Think of any travel you’ve had to do to and from your investment property in the past year. All your motor vehicle and travel expenses relating to your investment can be claimed. If you bought your investment property prior to the 201112 tax year, you can claim depreciation of the property up until that year. If you purchased your investment after 31 March 2012, you aren’t eligible to claim depreciation.
You can also claim interest paid on your home loan, but the loan must be specifically for your investment property.
Getting ahead of your finances
Getting into good habits now will help you achieve your financial goals next year. If you want to buy property in the next 12 months, start to think about it now. Work out how much you can borrow and the amount you’ll need for a deposit so that you can start preparing.
Assess your financial situation; look at your savings plan and adjust it if necessary. Be sure that you can continue to live comfortably with a home loan and that your future financial position is secure.
Get in the habit of filing receipts, invoices and recording your deductible expenses. If you’re currently paying a mortgage, review your home loan to work out if there are opportunities to save money there might be a better interest rate out there for you, or perhaps you’re paying for features you don’t use.
Think about where you want to be financially in 12 months time. What debts would you like to pay off? What improvements would you like to make to your home? Are you interested in buying an investment property? When it comes to saving or spending, forward planning is key. We can work together, look at all your options and put together a plan to help you achieve your goals.Tags: financial goals, investment property, tax benefits, tax time