Tax time might seem like a long way off, but smart property investors know that March is when the real planning begins.
If you own an investment property, now is the time to organise maintenance, finalise your records, and make sure you are claiming everything you are entitled to. Leaving it until June 30 can lead to higher costs, last-minute rushes, and missed deductions.
Take advantage of tax season with these tips.
Why March is the Right Time to Prepare for Tax Time
Many investors wait until June to schedule maintenance, thinking they will be able to claim expenses sooner. The reality is that waiting too long can lead to:
✔️ Higher costs as demand for trades and materials increases
✔️ Delays in getting work completed before the financial year ends
✔️ Financial strain from needing to cover multiple expenses at once
By planning early, you can manage costs over a few months and avoid price hikes from peak-season demand.
What Maintenance Should You Complete Before June 30?
Not all maintenance expenses are treated the same at tax time. Some costs can be claimed as an immediate deduction, while others must be depreciated over time.
Repairs and Maintenance (Claimed Immediately)
Repairs that restore the property to its original condition can usually be deducted in the same financial year. These include:
- Fixing leaks or plumbing issues
- Replacing broken fixtures or fittings
- Patching and repainting walls
- Servicing air conditioning units
- Garden and tree maintenance
Capital Improvements (Depreciated Over Time)
If you are upgrading or adding new features, these costs must be claimed over several years. Examples include:
- Installing a new kitchen or bathroom
- Replacing the roof
- Adding a carport or deck
- Structural renovations
Understanding the difference between repairs and capital improvements ensures you claim deductions correctly while following ATO guidelines.
Depreciation: A Commonly Overlooked Deduction
Many property investors miss out on tax savings because they do not claim depreciation. If your property was built or renovated after 1985, you may be able to claim depreciation on:
- Capital works such as walls, roofs, and flooring, which are deductible over 40 years
- Plant and equipment such as carpets, blinds, and appliances, which can be claimed based on their useful life
A depreciation schedule from a professional quantity surveyor, such as MCG Quantity Surveyors, can help ensure you are claiming the full deductions available to you.
Record Keeping: Make Tax Time Simple
The Australian Taxation Office (ATO) highlights the importance of keeping detailed records:
To stay organised, make sure you have:
- Proof of all rental income, including tenant payments and any insurance payouts
- Receipts for expenses such as repairs, council rates, insurance, and property management fees
- Loan documents and interest statements for any investment loans
- Records of capital improvements, including receipts for renovations and upgrades
Using a digital record-keeping system or working with a professional property manager can make this process much easier.
Take Action Now to Maximise Your Tax Return
Preparing for tax time is about more than just meeting compliance requirements. It is about making informed decisions that help you manage costs and maximise returns. By organising maintenance now, understanding what you can claim, and keeping accurate records, you can approach tax time with confidence.
Book a call with Patrick Mears to prepare your maintenance plan before tax time.
