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Property investors are again being urged to act quickly with the Australian Taxation Office (ATO) able to penalise taxpayers for failing to lodge their returns before 31 October.
Tax depreciation specialist BMT managing director Brad Beer implored investors to act quickly to make the most of tax time.
“For property investors, lodging a tax return is an opportunity to maximise the cash flows on their investment by submitting claims for depreciation, deductions on both capital works and plant and equipment,” Mr Beer said.
“Submitting past this 31 October might mean risking a penalty, which could then reduce the net cash flows otherwise delivered from the asset.”
According to the ATO’s website, the ‘failure to lodge on time penalty’ or ‘FLT’, is calculated at the rate of one penalty of $170 per 28-day block that the return is outstanding.
BMT reminded investors that those who have more than one tax return outstanding, a poor lodgement history, or who have not complied with a request to lodge their tax return are additionally more likely to receive these penalties and have their tax savings eaten into.
Mr Beer said the tax benefits that come with being a property investor can easily be diminished by accidentally missing Friday’s deadline.
“One of the cash flows generated by an investment property outside of rental payments comes from the depreciation deductions which are itemised in a professional tax depreciation schedule.
“However, these cash flows will be significantly reduced if investors forget to submit on time and incur one, or even multiple, penalties.”
Investors using a registered tax agent may be able to lodge later than 31 October without incurring an FLT according to the ATO, however Mr Beer said it’s important to discuss this possibility with a registered tax agent prior to the deadline.
“I urge all property investors who have not yet submitted their tax return to contact a registered tax agent immediately,” he said.