Tax Savings Tips to consider before 30th June
1. Tax Depreciation Schedules – This schedule will assess three components of the investment property:
- The building
- The property improvements
- The plant.
- From these valuations, your tax depreciation schedule will then depreciate each of the identified items as per ATO guidelines. The principal behind tax depreciation is to compensate the property investor for the loss of value in items that are being used to produce income.
A Real Property Matters Tax Depreciation Schedule will cover the depreciation requirements for the next 40 years.
The fee to complete this service can also be claimed back as a tax deductible expense.
If we have not saved you money after the first full year of depreciation, Real Property Matters will refund your money.
2. Partially renting out your home – Have you considered renting out part of your home? Do you have a spare room, with nothing in it?
By doing this you will turn a portion of your home into an investment property. This will then allow you to claim expenses relating to running your family home as a tax deduction.
Refer to the table of expenses for a list of items you will be able to proportionally claim. To justify your claim you will need to work out a reasonable basis to apportion that claim (e.g. what area of your home is income producing).
Check with your accountant regarding any CGT implications.
3. Prepaid Expenses – A prepaid expense is expenditure you incur for things to be completed in a later income year.
These expenses are things such as insurance or interest on money borrowed. If you incur prepaid expenditure for something that you will receive in full within 12-months or less, you are entitled to deduct that expenditure in the income year it was incurred.
This is particularly handy if you wish to prepay your insurance premiums for the next financial year on 30th June, allowing you to claim it as an expense on your current financial tax return.