Investment Property Tax Return​

Property and Negative Gearing

Many people feel that investing in property is a smart financial move that can lead to long-term gains, but it also comes with its own set of responsibilities.

One of the most important aspects of property investment is managing your taxes and ensuring that you’re taking advantage of all possible investment property deductions.

This is where our team comes in. At WISTAX, we specialize in taking care of your investment property tax return and negative gearing, so you can focus on your investment goals without worrying about the nitty-gritty details of tax returns.

Our team of tax experts has years of experience in handling investment property tax returns and negative gearing for our clients. We understand the complexities of property investment taxation and can help you navigate the process with ease. Whether you’re a seasoned investor or just starting out, we’re here to help you maximize your returns and minimize your tax liabilities.

Understanding Investment Property Taxation

Investment property taxation can be complex, and it’s important to understand the basics to make informed decisions about your investment strategy. When you purchase an investment property, you become eligible for tax deductions on expenses related to the property. These expenses can include interest on your mortgage, repairs and maintenance, banking fee, depreciation, lawn mowing, land taxes and property management fees.

However, it’s important to note that these deductions are available if your property is available for rent. If the property is vacant or not available for rent, you won’t be eligible for these deductions. It is also important to note that the timing of when you incur the repair can affect the deductbility of the repair, for example if you do the repair before the rental actually start, then you might not be able to claim those as deduction.

Additionally, there are limits on how much you can claim in deductions, so it’s important to work with a professional who can help you navigate the tax code and ensure that you’re maximizing your deductions while staying within the legal limits. For example, if you forgot to pay the land taxes in prior years, then you can not claim the lump sum land taxes in one year, but have to use special treatment to claim those.

At Wistax, we have a team of tax experts who specialize in investment property taxation. We can help you understand the nuances of the investment property tax return and ensure that you’re taking advantage of all possible deductions while staying within the legal limits. We’ll work with you to develop a tax strategy that meets your investment goals and minimizes your tax liabilities.

Understanding Negative Gearing

Negative gearing is another important aspect of investment property taxation. It refers to the situation where the expenses of owning an investment property exceed the rental income it generates. In other words, it’s when you’re making a loss on your investment property. While this may sound like a bad thing, negative gearing can actually be a smart financial move if done correctly.

The losses incurred from negative gearing can be used to offset other income and reduce your overall tax liability. This means that you can use your investment property to reduce your tax bill while still earning long-term gains from the property itself. However, it’s important to note that negative gearing is not a one-size-fits-all strategy and should be approached with caution.

At WISTAX, we can help you determine if negative gearing can improve your tax position. Our team of experts will analyze your financial situation and help you develop a customized taxation strategy that meets your needs. We’ll work with you to ensure that you’re taking advantage of all possible deductions while minimizing your tax liabilities.

Why Choose WISTAX?

Choosing the right team to handle your investment property tax return and negative gearing can make a big difference in your overall investment strategy. At WISTAX, as the leading accountant and registered tax agent in Inner West Sydney Ashfield, Belrose Northern Beaches, we have years of experience in handling investment property taxation and can help you navigate the process with ease. Here are just a few reasons why you should choose us:

  • We have a team of tax experts who specialize in investment property taxation
  • We can help you maximize your deductions while staying within the legal limits
  • We’ll work with you to develop a customized tax strategy that meets your taxation goals
  • We offer personalized service and are always available to answer your questions and concerns
  • We have a proven track record of success and have helped numerous clients maximize their investment returns

Investing in property can be a smart financial move, but it’s important to have the right team on your side to ensure success. At WISTAX, we’re committed to helping you achieve your taxation goals and minimize your tax liabilities. Contact us today to learn more about how we can help with your investment property tax return and negative gearing.

Frequently Asked Question

What is positive gearing?

Positive gearing refers to a situation where the income generated from your rental property is greater than the deductible expenses. This means you make a profit from renting out your property. It can be a beneficial investment strategy as it provides you with additional income. 

What is negative gearing?

Negative gearing occurs when the deductible expenses of your rental property exceed the income you earn from it. This results in a net rental loss. However, you may be able to claim a deduction for the full amount of rental expenses against your rental and other income, such as salary, wages, or business income. This strategy can be used to offset other taxable income.

Can I carry forward a rental property loss?

Yes. If your other income is not sufficient to absorb the rental property loss, you can carry forward the loss to the next income year. This means you can offset the loss against future rental income or other taxable income in the following years, potentially reducing your tax liability. 

No. In most cases, you cannot claim deductions for the cost of holding vacant land. The rules regarding deductions for vacant land have changed. It is advisable to refer to the specific guidelines or consult a tax professional for further information. 

What should I do if a contractor does not provide their Australian business number (ABN) for services and repairs?

If a contractor does not provide their ABN for services and repairs connected with your rental property, you may have to withhold 47% from the payment you make to them and transfer that withheld amount to the tax authority. Failing to withhold when required may result in not being able to claim deductions for these expenses. Ensure you check for the contractor’s ABN and comply with the withholding requirements. 

How do I include rental expenses in my tax return?

To include rental expenses you can claim a deduction for in your tax return, follow these steps: 

  •  Select ‘You had Australian rental income’ in myTax. 
  • Provide accurate details of your rental property, including income received and expenses incurred. 
  • Ensure you have proper documentation and evidence of the expenses claimed. 
  • Submit your tax return after reviewing and verifying the information provided. 
What if I am unsure about the deductions I can claim for rental expenses?

If you are unsure about the deductions you can claim for rental expenses, it is recommended to seek guidance from WISTAX, the leading accountant in Inner West Sydney Ashfield and Belrose Northern Beaches. They can provide specific advice based on your situation and help ensure you maximize your eligible deductions while staying compliant with tax laws.