Many individuals have investment properties, but quite often the right information is commonly overlooked.
Documents that need to be kept for your rental property.
The ATO requires:
· The date the contracts of purchase was signed (this is the day of purchase).
· The price the property was purchased for.
· The amount of stamp duty, any legal fees and bank establishment fees charged to purchase the property.
· The date the property was first rented.
· How many weeks in the financial year that the property was rented.
Any income earned by the property is accessible income.
Income for the financial year is the:Rental Property
· Rent received.
· Bond money used to pay for outstanding rent or damage to the property.
· Rent paid in advance.
· Insurance payments for rent not paid.
· Late rent paid.
This is reduced by the expenses spent to maintain the property.
Some examples are:
· Loan interest.
· Water rates.
· Council rates.
· Repairs and maintenance.
· Real estate agent fees.
The sale of the investment property will attract a Capital Gains Tax (CGT) for the period of time that it was rented out and earning an income, however there are ways of minimalising the CGT.
For further information on investment/rental properties please contact Absolute Accounting Solutions on 1300 488 330