6 Tax Tips to Help Property Investors Prepare and Save


An investment in property is always sound but can sometimes have a few hitches in the road. They don’t have to be related to anything you’ve done or are planning to do. More often than not, in fact, they aren’t. The matter of the fact is, there’s always something outside of the main picture that you need to think of. In the case of property investment, that’s tax. If you don’t pay attention to it, it can be the reason behind all your headaches. Nobody wants your investment to go awry. So, to avoid that fate, there are six useful tips to help you prepare and save some cash.

1. Don’t forget the deductions

You have the right to claim tax deductions for a number of things if you’re a landlord. Though, it needs to be noted that you can only claim them if your property is available for rent or has a tenant living there. This is because those deductions concern the rental expenses.

You should check out what other deductions you can claim, too. There’s a wide range of them, you just need to know which one you’re qualified for. Some of them include costs for maintenance and repairs, an interest in loans, management fees, and insurance costs. You can try to combat your deductions yourself, but it’s more advisable to talk to your accountant if you don’t have a lot of experience.

2. Look into the interest

One of the most specific tax deductions you should look into is interest on loans. Almost any investor can claim it, and that’s because most owned properties are up for rent or already have a person living there. Your interest can include one which was acquired through a mortgage or those interests related to borrowed shares. These are by far the most common ones. There are also other interests related to anything from your investment portfolio.

What this means more precisely, is that you don’t need to pay in tax what you pay in interest. That’s a lot of savings over a long period of time. You could always ask your accountant for more detailed information. Since the savings off of your interest can be really big, it’s important never to forget this step. It should always be the first thing you look into.

businessman on coins

3. Hold properties for a longer period of time

In order to avoid capital gains tax, you should hold onto your property for a longer period of time. To be more specific, don’t sell your property until you’ve owned it for over a year. What that means is that the money you make from selling will be counted as your income. That also means that you’ll pay tax according to the category you fit into now, according to your new income. So to avoid paying more, don’t sell right away.

In a scenario where you keep your property for more than a year and then sell it, you are taxed much less. In fact, the tax goes only up to 20% (depending on your tax bracket).

4. Calculate your rental expenses

When you own a property, there are some rental expenses which can help you claim the offset of tax. Sit down with your accountant or try accounting software and calculate all of your rental expenses. Then, you’ll be able to see what tax offset you are eligible for. It’s important to write everything down and calculate it thoroughly, as these rental expenses can add up to thousands of dollars over a longer period of time.

Some of the most common rental expenses include water rates, pest control, insurance, gardening, cleaning, land taxes, and council rates. Of course, this list wouldn’t be complete without body corporate fees and charges as well as property agent fees and commissions. Additionally, you could claim any offset on the travel you do. That being said, it needs to be directly related to the property you own.

5. Pay attention to depreciation

When there’s general wear and tear on a building, it causes something called tax depreciation. This process refers to the lower value the building gets because of the aforementioned wear and tear. It’s a good thing in a way because it makes for depreciation. In fact, some investors look into that before investing in a certain property.

That’s why it’s a good thing to have a good tax depreciation schedule. It’ll help you manage and keep track of the depreciation. A smart investor always has everything written down. It’s also helpful because another form of depreciation is possible- depreciation of fittings. It refers to the interior of the apartment. That means the lights, power points, windows, sinks, showers, and whatever else you can think of.

Small wooden home with nature light background.

6. Talk to a professional

If you still have some dilemmas and things you’re not sure about, it’s best to talk to a professional. They’ve been in the investment business a lot longer than you have, so it’s natural that you’d want them on your team. There are always companies you can turn to. Additionally, if you have a more experienced friend, they can also help you.

The important thing is that you choose someone you can trust. This is a very tricky business that involves a lot of money. There’s no room for mistakes or betrayals. Make sure the person you’re talking to has all the right information and is sharing all of it with you. What’s more, it might be a good idea to talk to more professionals about the same thing. That way, you’ll get the full picture.


As you can see, tax doesn’t need to be a scary thing to take care of. If you’re informed enough, you can do anything. Following these simple steps will allow you to invest with an ease of mind, knowing that you’ve done everything properly and correctly. It’s always important to play by the rules if you aim to achieve high results. We’re confident that you’ll be able to secure your investment in all the important aspects thanks to the tips provided above.

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