16 June 2021

5 Tax Tips for Property Investors

Here are 5 tax tips that save property investors time and money:

#Tip 1 – Engage a good accountant

It may sound obvious, however, if you don’t have one already, find a good accountant. You can save thousands by knowing which investment property deductions can be claimed in a tax return, or which purchasing entity is right for you. Beware that not all accountants are well versed in investment property. There is a myriad of elements to consider, such as constant changes in tax rules and regulation. If you intend on growing a property portfolio, then find a company with the right systems and team to support your goals.

#Tip 2 – Embrace technology to save you time

Modern accounting software, such as Xero, can help streamline and record the transactions relating to your investment property. For a minimal monthly subscription, you can obtain a ‘light’ version of Xero. The software can reconcile your income and expenses through direct feeds from your nominated bank, giving your accountant an instant snapshot of your position. This will ultimately save you processing time throughout the year. Sound Property clients also get access to their own Investment Portfolio. Our exclusive platform delivers an efficient and hassle-free purchase process throughout settlement and beyond. Sound Property’s Investment Portfolio is a central hub of information and storage. It is easily accessible and constantly updated with key purchase data, contacts and documents.

#Tip 3 – Get your property manager to pay bills

Most property managers will offer to pay your bills such as council rates, strata fees and landlords insurance from your rental income. You will save time throughout the year by not having to manage these payments yourself. Property managers can print a simple statement for you and your accountant at the end of the financial year. This tactic can reduce the preparation time required in a tax return.

#Tip 4 – Get familiar with changes to depreciation allowances

Washington Brown Quantity Surveyors dig deep into some of the questions they have commonly been asked since the 9th of May 2017, when the changes were announced in the Federal Budget. The major change was the reduction in depreciation you can claim on second-hand properties purchased after 9th May 2017. Newly built property bought from a developer or builder is still eligible for maximum depreciation allowances. Interestingly, these new changes do not affect commercial, industrial, retail and other non-residential properties.

#Tip 5 – Maximise your tax return

Your accountant can help you reduce your tax liability in multiple ways, for instance, by pre-paying eligible interest, undertaking some repairs on the property or getting a depreciation schedule done. Although tax concessions are beneficial for certain investors, in the long run, investors must buy the right property that appreciates over time. This appreciation in value will supplement any losses claimed in your previous tax returns.


Want to see how your next investment property will impact your income?
Sound Property’s FREE Cashflow Calculator combines the rental revenue and operating expenses of a property investment to measure the change in your weekly and annual income.



This article is provided for general information only. It does not constitute personal advice, as it does not take into consideration your personal circumstances. Always consult a licensed tax or financial advisor before investing.