By this time, you should have received your group certificate. Have you taken a long, good look at it? If not, take this time to check everything. Your group certificate or payment summary should tell you how much you’ve earned in the previous financial year and how much tax you’re paying. If you’re a property investor, these things should be of great importance to you.

Tax money up in the air

Your tax is intended to build roads, fund schools, and improve healthcare services, among others. But are you sure you know where exactly your hard-earned money goes? With news of Government officials using taxpayers’ money for things like, say a short helicopter ride from Melbourne to Geelong, you could be forgiven for asking questions.

Remember that when you pay your tax to the taxman, it’s gone. It’s in the Government’s hands already. You can’t take it back or use it for any other purposes unless you can legitimately claims for deductions. But what if we tell you that you can — and you should — reduce the amount of tax you’re paying to the Government? What if there are perfectly legal ways to pay virtually zero tax?

Tax breaks for property investors

When you spend money to maintain or improve the value of your property investment, you can claim the expense as tax deductions. These expenses reduce your assessable income, making you pay less tax every year.

Take Matt for example. He owns 5 investment properties and pays around $6,000 dollars in tax for his rental earnings. He can reduce his tax payable on his rental properties to zero by claiming some of his expenses against his assessable income. He may also be able to reduce his overall tax bill if he is negatively geared. Travel expenses to visit and check the properties count as tax deductibles, as well as insurance and interest expenses. Even agent fees and commissions can be claimed as tax deductions.

But among the rental property expenses you can claim, you should pay particular attention to depreciation schedule. It’s something some investors don’t know about, which is why they aren’t able to maximise the tax breaks available.

Organise a depreciation schedule

If you own a property built after July 1985, it helps if you could organise a depreciation schedule. This schedule shows the different rates of depreciation of the property’s structural elements like brickwork and equipment such as oven and dishwasher.

When you have the exact figures for every depreciation cost, you can claim them against your taxable income. For example, if your dishwasher costs $900 and has a 9-year life, you can claim $90 for 9 years. A quantity surveyor can organise a depreciation schedule properly, so make sure you get one.

Keep in mind that you should keep your receipts, so you can explain and justify your claims. Losing your receipts means losing money you can save from your taxes.

Take a closer look at your group certificate

Knowing your taxable position helped you to become a good property investor. Understanding how you can minimise your tax, however, separates you from the rest. You can start by taking a closer look at the group certificates you’re holding now.

Talk to us now to learn how to minimise your tax payable and use the amount you’ll save to grow your property portfolio.