Good record-keeping is the foundation of good tax planning. From the moment you purchase a property, make sure to document everything, including contracts, legal fees, loan statements, agent fees, repair invoices, depreciation schedules, and evidence of tenant communications. Having these records means you won’t miss out on deductions and makes capital gains tax (CGT) calculations far easier when you eventually sell.

Many property investors miss out on deductions simply because they don’t understand what’s claimable. Advertising for tenants, property management fees, council rates, loan interest, insurance, repairs, maintenance, and even depreciation on fixtures can all be deductible. Just ensure your property is genuinely available for rent, and adjust for any private use or vacancy periods.

The ATO is watching, and that includes rent from Airbnb, Stayz, subletting, or even retained bond money. You must declare all income received during the financial year, even if it comes through an agent or platform. Failing to report can lead to audits and penalties.

If your rental property generates significant income, you may need to make Pay As You Go (PAYG) instalments. Planning ahead can prevent surprise tax bills and smooth out your cash flow. Speak with your accountant to determine whether you need to prepay expenses, defer income, or make voluntary contributions.

When the time comes to sell, capital gains tax can eat into your profits. The taxable gain is calculated as the difference between your property's sale price and its cost base (including purchase price, legal fees, stamp duty, and improvements). If you’ve owned the property for more than 12 months, you may be eligible for a 50% CGT discount as an Australian resident. Just be aware that private use, discounts, or transfers below market value can impact your calculation.

Property investors can claim depreciation on both the building structure and eligible fixtures. Engaging a quantity surveyor to prepare a tax depreciation schedule can help maximise this deduction, particularly for newer properties or those with significant renovations. These deductions can amount to thousands each year.

Tax legislation changes often, and no two properties (or investors) are alike. A tax-smart investor knows when to call in the professionals. A registered tax agent or accountant with experience in property can help structure your ownership, forecast liabilities, and identify deductions you may have overlooked.