TAXATION REQUIREMENTS AND KEEPING OF FINANCIAL RECORDS FOR PROPERTY INVESTORS
Property Investment is a business, and you are required to file a taxation return for your rental activities. Because it is a business, you should adopt a business-like approach to your record keeping. Not only will you be minimising accounting fees by reducing completion time, but also ensuring that your Accountant has the opportunity to maximise deductions and minimise taxes payable.
It is advisable to:
| have a bank account dedicated to property affairs |
| keep all your paperwork (for tenancy and property related papers) in a file of some sort (e.g. Eastlight File, Manilla Folder) |
| Keep separate files for each property if more than one property is owned |
| Maintain a Motor Vehicle Log Book of trips in relation to the running of each property. |
| Request your lending institution to send you Loan Statements at frequent intervals to check the transactions on these- some institutions don't send these unless you ask them- in this respect it is also a good idea to ask the bank to have an ending date for the frequency you request at the last day of a calender month, and it is especially important to request an ending date which will end 31 March if you are a March balance date for income tax purposes. |
| Obtain chattel valuations at property if you wish your Accountant to break your depreciation down into a detailed chattel format. |
| Ensure you retain all Invoices from suppliers and service agencies for all costs and expenses related to the property. |
| Settlement statements from your lawyer for each property purchased or sold
during the year, including Vendor's Solicitor's Settlement statement.
| Registered Valuation or Government Valuation of each new property
purchased.
| Chattels Valuation if wish to
claim depreciation on a detailed basis.
| Loan Statements or print outs
from your lending institution covering the full year showing total
interest paid, principal paid and the closing balance of the lan at
balance date.
| Bank statements, cheque butts, invoices, receipts, cash books, or your
schedules of the business activity for each property, i.e. rent received and
expenses incurred.Typical expenses that are claimable are:
| |
 |
rates
| insurance
| interest on borowings
| borrowing costs
| loan repayment insurance
| agent's comission
| property management fees
| repairs
| cleaning
| gardening
| depreciation
| advertising
| telephone
| stationery/ postage
| hire charges
| pest control
| body corporate fees
| accounting fees
| business deductions
| electricity
| bank charges
| heating and cooling
| mower fuel
| rubbish disposal costs
| motor vehicle
|
home
office costs if appropriate |
|
any other relevant costs |
| Travel Costs - A distance log of the round trip kilometre
distance from your home to each property and the number of trips
you made in relation to your property for the year- this could include
inspections, visiting your accountant to prepare the accounts, buying items
for the service of the property such as repairs etc.
| Any outstanding accounts you had not paid but were due to pay at year-end.
| Details of any tenancy problems.
| Details of any capital improvements made to the properties and the cost of
these improvements.
| If you have a specific area at
your home you use in relation to the property information in relation to
these costs i.e. | |
-
area used for business.
-
total area home.
-
cost of home or particular premises used specifically for business.
-
construction of home or particular premises used for business.
-
rates account.
-
power account, % used for business.
-
interest on home mortgage.
-
insurance account on home and contents.
-
fixed assets used specifically for business.
- repairs on these fixed assets.
If we can assist further, please email TotalAccounting as follows:
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