With the End of Financial Year fast approaching, now might be the time to consider your claimable items for the last financial year. Here are some items which many investors miss claiming each year!
1. Not claiming enough
As an investor it is important to be thorough with your returns. Items such as smoke alarms, security systems, swimming pools and even garbage bins are often overlooked, but hold valuable tax savings. Fixtures and fittings with a depreciable value less than $300 can be immediately claimed in the first financial year. A garbage bin valued at $250 and smoke alarms valued at $145 are just two examples of items, which are eligible and can generate immediate tax savings.
2. Believing your property is too old
The age of a property does not necessarily rule out all deductions. In order to claim the capital works allowance for structural elements of a rental property such as walls, floors and ceilings, your property must have been constructed after 1987. However, owners of older properties can still claim deductions for renovations carried out after the relevant date, even if these were completed by a previous owner. Plant and equipment assets within the property such as carpets, hot water systems, blinds and stoves are also eligible deductions.
3. Missing deductions after renovations
Items that are scrapped and replaced during renovations can be eligible for deductions. Ideally, a property should be assessed before renovating to determine the value for scrapped assets, such as tiles or appliances like dishwashers and refrigerators, then after renovating to account for new additions.
4. Believing that once a return is gone, it should be forgotten
Just because an investment was purchased some time ago, or you have already lodged your return and not included something deductible on it, does not mean you have to miss out. The ATO allows two previous tax returns to be adjusted so investors would be wise to examine whether they have missed anything and if so, speak to their relevant adviser to have their tax return amended.
5. DIY deductions
Investors are always seeking to maximise their profit on their property portfolio, but as in other areas this doesn’t mean doing your own taxes is the best path to take. Not only is using a professional tax deductible, you’re also more likely to get a bigger return than you would doing your taxes alone.