The Labor Party is advocating to change the negative gearing policy in the next election, the proposal changes would involve limiting the deductibility of rental loss against other assessable income to new properties only, however, whether that particular legislation can be passed is still a question mark.
Many of us would tend to want to rent out our investment properties out by ourself to save on some rental agent fee, however, never do we realize, that if we do that, sometime we can complicate our situation in the tax audit time. If our investment properties are subject to tax audit, and the Australian Taxation Office would want to see the evidence of the income being received, and such evidences would be bank statements, and rental contract. However, if ATO gets a hold of your bank statement, sometime, there might be that surprise, as they might be able to find other avenues not included in the initial tax audit. The second fall back is that if you do not have a proper record keeping habit, and when Australian Taxation Office audit you, you might not be produce those records to ATO, then you will run a very high level of audit risk in term of substantiation evidence.
The biggest benefit in using the real estate agent to rent the property is that the fee you paid to the real estate agent are deductible for the financial year.
Also they will provide a rental statement to you at the end of the financial year, which equates to the summary of the income and the expenses, and sometime you can get the real estate agents to pay for the water and other fees, and they normally will keep the receipts for you, hence in the tax audit time, if you had lost the invoices, a copies of the invoices will be with the real estate agents.
As one of the most trusted and professional tax accountant and tax agent in Ashfield Sydney, we will be able to look after your investment properties tax return, we will provide 10mins free tax review for your past tax returns with investment properties to see whether your investment property tax return is done correctly. Please give us a call on 0410-829-900, or email us at email@example.com.