As the financial year comes to a close in Australia, homeowners have a golden opportunity to boost their returns by taking advantage of various tax benefits and deductions. Whether you work from home, have made improvements to your investment property, or want to optimise your eligible claims, understanding the tax system can make a significant difference. In this blog post, we explore the importance of the end of the financial year and highlight the deductions and claims available to homeowners.
Home Office Expenses:Since COVID, working from home has become the new normal for many Australians and as a result many of us now have a home office to think about at tax time. If you have a dedicated workspace at home, you can claim deductions for household expenses related to your work. This, depending on your exact circumstances may include utilities, rent or mortgage interest, property insurance, and depreciation on office equipment. In the busyness of life it can be easy to lose track of what you’ve spent, so remember, always keep accurate records and ensure your home office meets the criteria set by the Australian Taxation Office (ATO).
Depreciation and Capital Allowances:If you have an income-generating property, such as a rental, you can claim depreciation and capital allowances for certain items within the property. To maximise your deductions, consider engaging a qualified quantity surveyor who can accurately determine the depreciable value of assets. This will ensure you claim the maximum deductions available to you.
Investment Property Deductions:For homeowners with investment properties, like granny flats, it’s crucial to review and maximise deductions associated with your investments. This can include property management fees, council rates, advertising costs, and repairs and maintenance. However, it’s important to note that deductions are applicable only for repairs that restore the property to its original condition, not for improvements that increase its value. Keeping meticulous records throughout the year will help you ensure that you don’t miss out on potential deductions.
Prepayment Opportunities:Before the financial year ends, consider prepaying certain expenses to claim them as deductions. This strategy can include prepaying property insurance premiums, interest on investment loans, and subscriptions for professional memberships related to rental property management or investment activities. However, it’s advisable to consult with a tax professional or accountant to understand the specific requirements and limitations of prepayment deductions.
In summary, the end of financial year poses an ideal time for homeowners to consider their tax benefits and deductions. And we can’t stress it enough…remember to keep accurate records and stay up to date with the latest tax regulations. By doing so, you’ll make informed decisions for the year ahead and maximise the benefits available to you as a homeowner.