July 08 2020
Written by Ben Crow, COO at Properlytics.
When looking into property investing, it is important to make the right choices and know exactly what you are looking for when you are purchasing. Before buying any property, especially for investment purposes, it is important to calculate what the tax implications are, as any property earning income has its own tax obligations. Properlytics can help you to understand how a property can be beneficial for your financial position and help project after tax cashflow for years to come based on the calculations in the platform.
With the 2019/2020 tax year coming to a close last week, it is the perfect time to look into some tax tips for your investment property. Are you putting yourself in the best position to claim back as many deductions as possible for this year and years to come?
We have put together some tips to ensure that you're on top of your deductions, and help you claim back as much as possible in regards to your investment property/properties.
1. Make sure you include all of your income!
It is important to include all your income, whether that is from a short term holiday rental, sharing part of your home or any other additional income related to your property including insurance payouts and money you retain from the bond.
2. Make sure your expenses are correct
When you are claiming expenses related to your property, make sure they were incurred while your property was rented out or when you were actively trying to rent the property commercially.
Timing is key – not all expenses can be claimed at once, it is common for some expenses to be claimed over a number of years. Make sure you know the difference!
3. Keep records to prove everything!
You should keep records of both income and expenses relating to your rental property, as well as purchase and sale records. It is important to stay on top of all these throughout the year. This includes uploading receipts, proof of purchase/ bank statements and uploading all documents somewhere securely so they are nice and easy to find at the end of the financial year.
We recommend using the WLTH Finance Tracker for this. It makes it nice and easy to store all your important documents and information in one place with all your other finances.
Properlytics is an in-depth property calculations and projections tool that helps you understand the true value of your investments. Download Properlytics and complete an investment analysis with absolute precision today!