Tips to Keep Smart Records for Your Investment Property Journey
Being tax-smart when investing in property means more than choosing the right property to purchase. Keeping smart records will ensure your investment property journey is well managed.
If you use your property to earn income at any time you will have tax obligations & entitlements.
Regardless of who prepares your tax return, you need to keep proper records over the period you own the property whether you rent the property out or use it as a holiday house. The only time tax is not involved is if it is your principal place of residence (ie where you live).
Getting your “paperwork” organised at the beginning of the investment property journey will make life a lot easier down the track.
Here are a few great tips on how to best record your property transactions…
1) Keep clear and concise records
Setting up a simple record-keeping system is your first priority. This can be via spreadsheet or using account keeping software.
2) Keep copies of your documents
Keep records of every financial transaction that occurs during the transition to owning the property. This includes purchase/sale contracts, settlement statements & loan documents.
3) Record the costs you incur during the purchase process
Keep a record on your spreadsheet or account keeping software of the costs of buying the property such as legal fees, stamp duty & any initial repairs.
You can’t claim an immediate tax deduction for these but they will reduce the tax you pay when you sell the property.
For any further assistance on how to be financially smart with your record keeping or investment property decisions, feel free to call one of our savvy STS accountants – we’re more than happy to answer any of your questions at any time.
