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Financial Planning: Preparing You Tax Receipts

Invest Time in Helping your Investment Property Pay for Itself

Claim All Possible Deductions.

Take a moment to review the list below and compile paperwork for expenses you have incurred.

Investors don’t have to wait for tax returns to benefit from negative gearing.

A common investment strategy is to finance the purchase of residential property using debt which can be in the form of a mortgage over the property. Generally, interest expenses incurred in connection with the mortgage will be deductible for income tax purposes by the investor.

Where interest and other related expenses (such as rates, repairs and insurance) exceed the rental income from the investment property, the investment is commonly referred to as “negatively geared” because tax deductible expenses exceed rental income.

Investors have the potential to bring this benefit forward by either:

1. Salary sacrificing interest payments (paid under an arrangement with their employer). This has the effect of reducing tax installments that would otherwise be withheld by the employer from salary or wages. (Note: you should check Fringe Benefits Tax implications)


2. Submitting a form to the ATO requesting a reduction in income tax installments (that the employer would otherwise be required to take from salary or wages) deducted by your employer based on your expected net rental loss (PAYG income tax withholding variation (ITWV) application (NAT 2036).

The Australian Tax Office publishes an extensive Guide for Rental Property Owners, a very comprehensive document that includes clear case studies explaining how the rules are applied to individual situations. Deductions for rental expenses, capital gains tax , negative gearing and depreciation are explained in detail as well as how to treat rental income and expenses, including more than 230 residential rental property items.

Read the full article below or see other popular articles

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Buying Property Checklist  A very comprehensive checklist to use when buying a property.

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Development Finance for property development

An extensive library of Checklists, Forms and Guides can be found in our archive library.

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