How are you planning to reduce tax this year? Well, you could take your tips from Martha Stewart or Wesley Snipes who have been famously busted for tax evasion.
But unless you’re shooting for notoriety and jail time we’d recommend you go legitimate.
Here are #4 tips property investors can use to legally reduce their taxable income, courtesy of Property Update. And, needless to say, talk to your own accountant too about what’s right for you.
- Prepay next year’s interest on your investment loan. But you can only do this if you have a fixed rate.
- Prepay other property costs like rates or insurance.
- Get a depreciation schedule and keep it up to date with changes or additions. If you’re doing a renovation get a scrapping schedule which allows you to depreciate the things you replace like old carpets. You’ll need a quantity surveyor to help with this.
- Did you take advantage of record low interest rates and lender competition this year? Remember your break fees and lenders mortgage insurance are tax deductable.