Getting Your Rental Property Taxes Right

The Australian Taxation Office (ATO) reminds rental property owners and their tax agents to be extra careful when filing their tax returns. 

A recent review found that 9 out of 10 rental property owners need to correct their returns. Here’s what you need to know to avoid errors:

• Include All Rental Income: Make sure you report all rental income, including earnings from short-term rentals and any other rental-related income.
• Report Income Accurately: Report rental income in the year when the tenant pays it and as the gross amount received before deductions.
• Avoid Double-Dipping: Don’t claim expenses you have subtracted from your net rental income.
• Expense Categories: Expenses fall into three categories: those you can’t claim, those eligible for an immediate deduction, and those claimable over several years.
• Interest Expenses: Be careful when apportioning interest expenses, especially if part of the loan was used for private purposes.
• Maintain Records: Keep records showing your expenses related to producing rental income.
• Apportion Expenses: If your property is not used for rental income (e.g., for personal use), divide your deductions accordingly.

Remember, you’re responsible for the accuracy of your tax return, even with a tax agent such as ourselves.

For personalised guidance, contact your Simmons Livingstone accountant on 1800 618 800 or via email to admin@simmonslivingstone.com.au.