Tax is complex, boring and time intensive, especially if you’re an investor with multiple properties in your portfolio. But each little bit of work you don’t put in at tax time could set you back financially.
That’s where your accountant comes in. And not just your Uncle Barry who you go to because everyone in the family does… your accountant should specialise in property investment.
Whether it’s your investment portfolio or your family home, property is likely to be the asset that makes or breaks your financial future. So you need the best help to make sure you get it right.
A complex matter
There’s plenty to think about with property tax. There’s capital gains tax (CGT), negative gearing and depreciation, plus if you own your properties under different structures such as a trust, the fun goes to a whole new level.
Then there’s the ever-changing list of expenses that are eligible as deductions. For example, you might be thinking about investing in a property on the Sunshine Coast and using it yourself every now and then, or using a holiday as a chance to inspect it…but did you know you’re no longer able to write off the costs of travelling there?
Self-managed super = super confusing
Many more Aussies are managing their own super through a self-managed superannuation fund (SMSF) these days. And the Aussie love for property means a majority of those funds want to invest in it as a key asset.
But SMSFs have some of the strictest rules and regulations when it comes to being compliant and, unless you are in touch with a specialist accountant, you might find avoiding fines and penalties is so time confusing it’s like a second job.
What they must bring to the table
Choosing the right accountant can mean ensuring they are well versed in the intricacies of property laws. They should have an extensive “off the cuff” knowledge of CGT concessions, negative gearing strategies and depreciation schedules specific to real estate investments, so you can maximise deductions and minimise liabilities.
They also need to be forward thinking. The right accountant will engage you and seek understanding of your overall goals, so they can help you tailor a strategy that suits your needs. They should help you structure your investments to optimise tax benefits.
Finger on the pulse
Tax laws change pretty frequently, so your accountant should be across developments in the field as well as emerging threats to your strategy. Most legislative changes come with fair warning from the government and a lengthy process of passing houses of parliament, but your accountant should also be keeping an eye on trends that could indicate future changes. Ideally, every year in May when the government delivers its federal budget, your accountant should be able to explain all items relevant to property investment.
Are they invested?
Any accountant that specialises in property will usually be a property investor themselves. Be prepared to ask the accountant if they have a property portfolio and how many properties they have.
If they don’t think it worthwhile putting their own money in property, or they recommend the type of investment options that don’t appeal to you, you may not be on the same page and they may not be engaged enough to help you achieve your goals.