Property accountant for investors & developers

Owning an investment property in Australia has several tax implications. Rental income from the property is considered taxable income and must be reported on your tax return. You may also be eligible to claim deductions for property-related expenses such as interest on loans, council rates, repairs and maintenance, property management fees, and depreciation. Additionally, when you sell the property, you may be liable for capital gains tax on any profit made from the sale.

Negative gearing is a strategy where the expenses of owning an investment property, such as loan interest and property-related costs, exceed the rental income. This results in a net rental loss that can be offset against other taxable income, potentially reducing your overall tax liability. Negative gearing can benefit property investors by providing tax advantages and improving cash flow, particularly in the early stages of property ownership.

There are several property-related expenses that you can claim as tax deductions, subject to certain conditions and limitations. These include interest on loans, council rates, property management fees, repairs and maintenance costs, insurance premiums, and depreciation expenses. However, it is important to keep accurate records and ensure that the expenses claimed are directly related to the property and are not of a private or capital nature.

Capital gains tax (CGT) is calculated when you sell a property by determining the difference between the sale price and the original purchase price. This is then adjusted for certain costs, such as acquisition and disposal expenses, capital improvements, and eligible deductions. The resulting capital gain is included in your assessable income and taxed at your marginal tax rate. However, there are exceptions and reductions available, such as the main residence exemption if the property was your primary residence for part or all of the ownership period, and the CGT discount for properties held for longer than 12 months.

To ensure accurate reporting of property-related income and expenses, it is important to keep detailed records. This includes documents such as rental income statements, invoices for repairs and maintenance, loan statements, receipts for property-related expenses, and records of any capital improvements made to the property. Keeping organised and thorough records will help substantiate your income and deductions claims and assist in case of any ATO audit or review.

If you own property overseas, it can have tax implications in Australia. You may need to report any rental income received from the overseas property on your Australian tax return. Additionally, you may be eligible for foreign tax credits to avoid double taxation if you have paid tax on the rental income in a foreign country. The tax obligations related to overseas property can be complex, so it is advisable to seek the guidance of a tax professional who specialises in international taxation.

Renting out your property through a service like Airbnb has specific tax considerations. The rental income generated from Airbnb activities must be declared on your tax return. You can claim deductions for expenses directly related to the rental, such as advertising costs, cleaning fees, and guest amenities. However, it is important to note that the ATO has specific guidelines regarding the distinction between renting a room in your primary residence and running a business through short-term rentals. Seek professional advice to ensure you understand and comply with the tax obligations associated with renting out your property on platforms like Airbnb.

If you decide to turn your primary residence into an investment property, or vice versa, there are tax implications to consider. When you convert your primary residence into an investment property, you may trigger CGT on the property’s market value at the time of conversion. However, you may be eligible for the main residence exemption if you meet certain conditions. Conversely, if you convert an investment property into your primary residence, you may be entitled to a partial CGT exemption based on the period it was used as an investment. It is important to consult with a tax professional to understand the specific

If you inherit a property, there may be tax obligations depending on the circumstances. In Australia, when you inherit a property, you generally won’t have to pay capital gains tax (CGT) at the time of inheritance. However, if you later sell the inherited property, CGT may apply based on the property’s market value at the time of inheritance and the sale price. The CGT calculation will consider factors such as any expenses incurred during ownership, the length of time the property was held, and any available CGT exemptions or concessions. It is advisable to consult with a tax professional to accurately determine your tax obligations and understand any available exemptions or concessions.

Our services can assist you in optimising your property investments for tax purposes. We have a team of experts who specialise in property taxation and can provide tailored advice based on your specific situation. We can help you identify and maximise eligible tax deductions related to your property investments, such as rental expenses, depreciation, and loan interest. Our professionals stay up to date with the latest tax regulations and strategies, ensuring that you are fully compliant with the law while taking advantage of available tax benefits. By leveraging our expertise, you can optimise your property investments, minimise your tax liabilities, and make informed decisions that align with your financial goals.