EOFY Strategies For Australian Property Investors

As the new financial year begins, property investors have a golden opportunity to fine-tune their financial strategies and make the most of tax benefits. Here are some key strategies to consider, with a focus on paying interest in advance and the advantages for self-employed individuals.

Strategies For The Self-Employed

For self-employed property investors, preparing properly for lodging your FY24 tax returns is extremely important. Here are some moves to consider:

• Updated Financial Records: Ensure your financial records are up to date. This includes all income, expenses, and deductions related to your property investments. Accurate records are essential for maximising your tax deductions and ensuring compliance with Australian Taxation Office (ATO) requirements.
• Tax Deductions: Take advantage of all available tax deductions, including those related to property investments such as maintenance, repairs, depreciation, and interest expenses. Consulting with a tax professional can help you identify all possible deductions and ensure you are not missing out on any tax benefits.
• Review Your Investment Portfolio: Evaluate the performance of your investment properties. Consider if it’s time to sell underperforming assets or if you can take advantage of any capital gains or losses.
• Depreciation Schedules: Ensure your depreciation schedules are up to date. Depreciation can be a high tax deduction, and having accurate schedules prepared by a qualified quantity surveyor is essential for Australian property investors.
• Prepaid Expenses: Look into prepaying expenses such as insurance or property management fees. Prepaying these expenses can provide additional tax deductions in the current financial year.
• Superannuation Contributions: Consider making additional superannuation contributions. This can be an effective way to reduce your taxable income while also boosting your retirement savings, taking advantage of the Australian superannuation system.
• The EOFY is a critical period for Australian property investors to review their financial strategies and maximise tax benefits. By taking proactive steps now, you can ensure you are in the best possible position for the new financial year.

Reminder: It is important to seek advice from a professional before taking any of these steps to ensure they are appropriate for your specific circumstances.

Next Year, Consider Paying Interest In Advance

One of the most effective EOFY strategies for property investors is paying interest in advance. This tactic is not just about saving interest by paying upfront; it’s primarily about shifting the interest cost to the current tax year.

Here’s how it works:

Example Scenario: Suppose you have a substantial tax bill this year but anticipate a lower income next year. By paying next year’s interest on your entire property portfolio in advance, you can claim all that interest against this year’s income. This approach can reduce your taxable income and, consequently, your tax bill for the current year.

Paying interest in advance is a powerful tool for managing your tax liabilities, especially if you foresee a lower income in the following year. It allows you to take control of your tax planning and optimise your financial outcomes. Something to keep in mind for 2024-25.

Are You Looking To Invest In Property?

Our passionate team of specialist mortgage brokers is dedicated to helping you every step of the way. Start by using our investment property calculator to get a clear picture of your potential cash flow. Then, let us guide you to the best investment loan personalised for your needs.

Call us on 1300 889 743 or fill in our free online assessment form.