Owners of rental property need good tax advice. There are many taxes that apply during the course of property ownership. The Goods & Services Tax and Capital Gains Tax are merely just two examples. However, there are benefits to owning rental property that can give you many tax advantages. One of the major benefits is a rental property depreciation schedule.
One of the tax advantages to consider is the rental property depreciation schedule. In essence, depreciation means the Australian Tax Office gives you a break because your property ages. As properties get older, they go down in value. This is due to natural wear and tear. Ultimately, you end up paying less in taxes because of depreciation. However, depreciation must be calculated a specific way according to the ATO guidelines. That is why it is necessary to develop a conforming rental property depreciation schedule.
Aside from the rental property depreciation schedule, there are also other tax deductions associated with owning rental property. For example:
If you own rental property, you will need to pay income tax for rental income. Calculating your tax should include all of the necessary deductions for depreciation and other allowances. Minimizing your taxes is the goal that you should strive for.
Capital gains tax is another issue to consider when selling rental properties. You will be required to pay tax on the difference of the price at which you bought the property and the price at which it sold. Furthermore, rental property taxes can include multiple gains or losses that need to be added and subtracted to form a net gain or loss.
If you own rental property, it is important to know about some of the other complimentary accounting services offered by Tim Nash & Associates. As a complete accounting firm, we can help you establish and realize a larger picture of wealth management.
You may want to avail of our business tax advice to plan ahead for future goals. Likewise, one of the services that can allow you to get a feel for our professionalism is ordering a due diligence report. If you are considering purchasing a property, it is important to know the numbers presented to you are accurate. Many times, sellers inflate numbers in order to paint a better picture of the property’s potential.
If you would like to know more about how we can help you with rental property tax deductions or establishing a rental property depreciation schedule, give us a call today.