Investment Properties - Are you Keeping Adequate Records?
The ATO has advised that their recent reviews indicate that some investment property owners are not keeping adequate records to support the income returned or claims being made in regard to rental properties.
Documentary records should be kept for both income and expenses relating to a rental property.
Records of rental expenses must be in English, or be readily convertible to English, and include the:
- name of the supplier of the goods or services
- amount of the expense
- nature of the goods or services
- date the expense was incurred, and
- date of the document.
If the document does not show the payment date, independent evidence can be used to show the date the expense was incurred, such as a bank statement.
Records of your rental income and expenses must be kept for five years from 31 October or, if a return is lodged after this date, five years from the date of lodgment. If at the end of this period there is a dispute pending with the Tax Office, all records must be kept until this dispute is resolved.
Capital Gains Tax
For capital gains tax purposes, records relating to ownership and all the costs of acquiring and disposing of the property must be kept for five years from the date of disposal. This is the case even where the property has been inherited, received as part of a divorce settlement or as a gift, or where improvements have been made to the property.
Please contact our office for more information.
