Property investment is taxed on the details, and most errors are honest ones made in the first year and repeated every year afterwards.
Mistake one: claiming a repair as a repair when it's really an improvement. Replacing a roof is capital works; fixing a leaking tap is a repair. The timing of the deduction changes, and the ATO is attentive to the difference.
Mistake two: forgetting depreciation entirely. Capital works deductions and plant and equipment depreciation are often the largest deductions available, but only if a quantity surveyor prepares a schedule.
Mistake three: splitting ownership for lifestyle reasons rather than tax outcomes. The ownership split at purchase usually determines who claims what, for as long as you hold the property.
Mistake four: no contemporaneous records. Keep loan statements, invoices, strata notices, insurance and any correspondence about the property — reconstructing a year of evidence at lodgement time is expensive.
Mistake five: missing the CGT implications until sale. Main residence exemptions, the six-year absence rule and trust distributions all need planning years ahead, not weeks.
Mistake six: treating the return as an annual event. A ten-minute mid-year conversation about a refinance, a new purchase or a change in income is usually worth more than the lodgement itself.
Information on this website is general in nature and is not personal financial, tax, legal or credit advice. It does not take into account your objectives, financial situation or needs. Property through a self-managed super fund involves significant compliance obligations. Obtain licensed financial, tax and legal advice before establishing an SMSF or acquiring property through one.