Brisbane landlords, property taxes and rates etc

Brisbane landlords: some of the best June 30 tips we’ve heard

The lead up to June 30th is the perfect time for Brisbane landlords to do a review of their properties’ performance, assessing the past 12 months and planning to minimise their holding costs. One of the great parts of our work as property managers is to have clients share their investment tips with us, providing decades of their experiences in maximising deductions and making their real estate work hard for them.

So here’s some of the best, including an often overlooked tip to improve your cashflow next year (but you must act before June 30), plus a warning on one fee you should never pay your property manager!

1. Know your current values – sales and rent: Says one of our long-term clients: “You can only make sound decisions and plan well when you’re well-informed and that starts with these two numbers.” Many of our Brisbane landlords have us prepare a sales appraisal every June 30th. We have all the info we need to do this without bothering your tenants. Similarly we can do rental market appraisals in quick time and with no obligation.

Despite the media headlines about rising shortages, there’s still a lot of vacant rentals in Brisbane’s inner-city and rents are not rising as fast as some would claim. Be fully informed with a current rent estimate. And BTW, most of our clients know they’re far better to keep a good tenant happy than to chase every last dollar of possible rent.

A sales appraisal will help you do another important yearly check: Is your insurance cover adequate? Contact our team for a free rental or sales appraisal and we’ll get right on it!

2. Talk to your accountant about “getting your tax refund early”: One client recently reminded us that the ATO allows you to vary the amount of tax you pay during the year if you know you’ll have bigger than usual deductions (as most property investors do). It’s a simple step but we’d suggest most investors forget to do it. To have this in place for the start of next financial year the ATO says you’ll need to apply before June 30.

Brisbane landlords3. Do your maintenance now: There’s a number of ways you can bring forward expenses to make them a deduction before the end of this year and attending to non-urgent maintenance is a good one. Your airconditioners should be serviced annually and gutters cleaned. Have you upgraded your smoke alarms to comply with the January 2022 deadline? (Smart investors are getting this booked in now to avoid the last minute rush when it’s inevitable prices will be pumped up. It will be illegal to sign a new lease in 2022 without the upgrade.)

A reminder: It’s worth a chat to your accountant about what can be claimed in full immediately as a repair/maintenance. The ATO says: “generally the repairs must relate directly to wear and tear or other damage that occurred as a result of your renting out the property”. On the other hand improvements must be written off over a period of time. The ATO says they’re an item that “goes beyond just restoring the efficient functioning of the property”.

4. Don’t forget the write-downs of fixtures and fittings: After 2017’s amendments many of us assumed these no longer applied to us. But a landlord recently pointed out that’s only for any property you’ve bought or first made an investment after that date. And even then you can still write off items that you install! (Brand new properties were excluded from the changes.)

As much as we all need a good accountant with a solid knowledge of property deductions, the ATO’s website has the full guide to investment property tax deductions No, it’s not a gripping read but it might save you money!

5. Be careful about holiday rentals and ‘part-time investments’: Says the ATO: “You can claim a deduction for your rental property related expenses for the period your property is rented or is genuinely available for rent” (our emphasis). We’ve had a landlord or two try to list their property with us for a hugely inflated rent so it’s never leased. Bad news – the ATO won’t cop that.

6. Check your depreciation schedule:  Is the one you’re using accurate and up to date? A lot of our clients have succeeded in really improving their deductions after getting a new schedule and, pleasingly, they’ve also gone back and amended previous years’ returns to claim extras. Our team will happily organise this for our landlord clients.

7. The ATO says you can claim land tax as a deduction. It’s not fun paying it to the state govt; the pain is slightly less when the feds give you some back…

8. There’s been lots of chatter this week that the banks have begun raising rates Many landlords use EOFY as a good time to review their loan and lock in lower rates. Pre-paying next year’s interest (ATO usually allows up to 12 months) is also a nice way to pull forward what’s commonly your biggest deduction.

9. And finally a tip from us: Please don’t pay your property manager for their routine inspections and reports! We’ve noticed this one sneaking into our competitor’s fee schedules recently, (sometimes even added without current clients’ consent). Your agent must be current on their knowledge of your property to do their job so inspecting it should not be an added extra. Maybe it’s time to chat with the Bees Nees team about our property management service!

PS: Bees Nees Brisbane landlords clients receive an annual property “health check‘ as part of our service. In this chat with our Client Service Manager Ann-Marie we take an ‘under the bonnet look’ at its current rent and position in the market, its maintenance history, future upgrades/repairs and ideas on broadening its rental and sale appeal. We also look at its neighbourhood and how that’s changing, plus broader trends impacting its value. Chat with Ann-Marie about our property management service.

This important note applies as always: Please get your tax and investment advice from the appropriate experts in accounting and financial advice who know your personal circumstances well. We’re experts in managing and selling Brisbane property only.