1. Keep the bigger picture in mind
It’s important that you don’t let your record-keeping overwhelm you – to the point that it discourages your from buying further investment properties. Be on top of your record-keeping from the start and have a simple system that works for you. A good filing system and a spreadsheet for starters. Online software such as Xero Cashbook are an even better option.
2. The first year is the most complicated
You won’t be able to claim immediate deductions for all your expenses in the first year – some expenses may need to be written off over several years and some may come into play when it comes time to sell. Be sure to keep extra documentation such as your purchase and sale Contracts, conveyancing documents and loan documents. An accountant experienced in preparing Tax Returns for property investors will know the ins-and-outs, but it’s in your best interests to ensure they have access to everything in order to get the best outcome for you.
3. If you can’t substantiate it, you can’t claim it
Make sure you keep invoices, receipts and bank statements for all property expenditure, as well as proof that your property was available for rent, such as rental listings. Purchase a diary to help keep track of key dates and travel.
4. Your record-keeping responsibilities aren’t over once a property is sold
Capital gains tax may apply when you sell your rental property. Keep records over the period you own the property and for five years from the date you sell the property.
5. Protecting your documents
Scan all your receipts and paperwork for safe-keeping and peace of mind. Have you ever pulled out a cash register receipt after 6 months and the writing has already faded? Imagine what it will look like in 5 years’ time.
In the words of the Australian Taxation Office:
Keeping proof of all your income,
expenses and efforts to rent out your
property means you can claim everything
you are entitled to.
Happy bookkeeping…
Sarina
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Hi Thanks for the Post. The post would teach so many tips about Investing property record.
all mention tips would help for surly to keep my documents safe.
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Thank you for reading 🙂
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