TOP 7 TIPS TO MAXIMISE YOUR PROPERTY TAX RETURN

TOP 7 TIPS TO MAXIMISE YOUR PROPERTY TAX RETURN: But we're here to tell you otherwise thanks to prudent real estate investment! After the year's halfway point, many investors are frantically trying to figure out what they may claim from their property tax returns. In this article, I've done the research and prep work for you and come up with our top 7 ideas to maximize your returns for 2022. Check them out! 1. Costs of Depreciation: The value of an asset less all accumulated depreciation that has been recorded against it is referred to as depreciated cost. Any property that produces income may be eligible for significant returns in the form of depreciation deductions in the context of real estate investment. In actuality, the majority of investors are eligible to claim an average of $5,000 to $10,000 in the first full financial year alone. The fact that property depreciation is a non-cash deduction—i.e., the investor does not have to spend money to claim it—means that it is frequently overlooked. 2. Rental Income and Other Costs: Rental income is regarded as taxable income by the Australian Taxation Office (ATO), however, investors can deduct expenses to lower this amount, including but not limited to: Property Management and advertising fees Maintenance/repair costs Depreciation costs Any bank fees and/or loan charges Insurances (i.e. landlord insurance, home and contents insurance) Legal costs (adsbygoogle = window.adsbygoogle || []).push({}); Land tax Body corporate Council rates Water charges Cleaning, gardening and lawn mowing Pest control Interest expenses. 3. Renovations, upkeep, and repairs: A property's repairs that are necessary for any "wear and tear" may be written off. Examples of this include restoring a fence that was harmed by a fallen tree branch, replacing broken gutters, necessary appliance repair, and roof repair following a storm. It's vital to note that the aforementioned regulation still applies when appliances are repaired rather than completely replaced. 4. Make Sense Of A Split Report: To maximize the returns for each co-owner of a property, it is highly advantageous to organize a split report. It is crucial that this advice be given by a skilled accountant in order to guarantee that clients who co-own investment properties are maximizing deductions. (adsbygoogle = window.adsbygoogle || []).push({}); 5. Modify previous returns: Many investors forget that they can alter two prior tax returns to take advantage of any overlooked deductions. Engaging a professional, such as a quantity surveyor, an accountant who specializes in real estate, or a property investment strategist like those listed HERE, is the ideal method to accomplish this. 6. Capital Gains Tax, (CGT): You must pay CGT on the sale profit if you sell your investment property within a year of purchasing it. Capital gains are taxed at the same rate as taxable income in Australia. For instance, if you make a capital gain of $60,000 while earning $40,000 per year (32.5 per cent tax bracket), you will pay income tax of $100,000 (37 per cent income tax) and capital gains of $60,000 will be taxed at a rate of 37%. However, you are qualified for a 50% CGT discount if you own the investment property for longer than 12 months before selling it, which means you only need to report half of the capital gain on your tax return. 7. Withdrawals from equity loans are not subject to tax: You won't be required to pay taxes on any money that you remove through an equity loan. This means that if the value of your property increases and you don't want to sell it, you may actually access some of that money by obtaining a loan from a bank. You still have access to that amount of money despite the fact that your loan and monthly payments increase. By doing this, you haven't truly improved your financial situation through the equity loan, thus it usually isn't a tax deduction because it isn't technically a "gain that's been accessed." (adsbygoogle = window.adsbygoogle || []).push({}); Investors that choose this option can leverage the funds to buy other rental properties, which will hasten the expansion of their portfolio. Check out the video HERE for more details on tax deductions and real estate, Source: Alliance Corps Australia.