About Investment Property

 Author: Bruce4Tax(Taxicorn)Taxicorn

12 June 2021

I recently owned an investment property and had it leased through a real estate agency. The lease begins from 15 June 2021. I have some questions regarding how to calculate income and expense related to this property.

I will receive my rent which covers from 15/06/2021 to 14/07/2021. I will pay the agents commission which covers the same time period. I have also already bought a landlord insurance which covers from 15/06/2021 to 14/06/2022. All the above costs cover this and next financial years. Do I need to apportion them to the end of this financial year. For example, there are 16 days from the beginning of the lease to the end of this financial year. Do I need to report my rent income as: monthly rent x 16 / 30 ? The same question applies to agents commission, insurance premium, further to council rate, water rate ...

No - rental income and expenses are reported on the basis that they are received/paid.

Apportioning is for when, say, rates are paid for a full year, but the property was only available for rent during part of the year.

Or if there is some other form of private use.

In addition, do I have to involve a tax accountant to prepare my tax return report. Or can I report my income and expense related to this investment property myself on ATO website when I submit my tax return form online?

Tax agent is strongly recommended - rental properties are complex.

For example, if the property was bought recently, then you need to consider the rates adjustments.

If the property was constructed less than 40 years ago, you should benefit from a quantity surveyor report.