Record Keeping For Rental Properties

If you own a rental property, maintaining accurate and organised records is essential. Good record keeping helps to ensure you correctly claim rental deductions, accurately calculate Capital Gains Tax (CGT) when you sell the property, and respond to any ATO queries.

The ATO’s fact sheet provides an example summary checklist of documents investors may need to retain.

We recommend referring to this fact sheet, as well as the ATO’s Record Keeping For Rental Properties, for a more detailed summary of possible requirements.

ATO – Record Keeping for Rental Properties Fact Sheet Download

A Simplified Introduction to Record Keeping

To introduce you to some key concepts, simplified, click on the tiles below.

When Do You Need To Keep Records?

According to the ATO, when you own a rental property, you’ll need to keep records:
• Right from the beginning, before you even sign the contract.
• Every year that you own the property, including records of your income and expenses.
• When you sell the property, and at least five years after it is sold.

How Long Do You Need To Keep Records For?

The ATO typically requires rental property owners to keep tax and expense records for at least five years from the date they lodge their tax return.

Records relating to the purchase, ownership and sale of the property should generally be kept for at least five years after the property is sold, as they may be needed to calculate Capital Gains Tax (CGT).

If you amend a tax return, records may need to be retained for longer to cover the amendment period.

In some cases, the ATO may also request these records as evidence that you personally incurred the expense being claimed.

Records You Need To Keep

This is not a comprehensive list, but rather a general overview to give you an idea of the types of records you may need to keep:

• Records of rental income.
• Records of expenses.
• Records relating to the purchase and sale of the property.
• Records of borrowing expenses and loan documents.
• Records for capital works and improvements.
• Depreciation and capital allowance records.

How To Keep Records

The ATO also recommends keeping separate records for each rental property or holiday home to help ensure income and expenses are accurately tracked.

Records must be kept in English (or be easily translatable into English) and can be stored electronically or in paper form.

If you choose to keep digital records, it is a good idea to maintain secure backup copies in case records are lost or corrupted.

Know The Difference

Repairs and maintenance: These may be immediately deductable.
Capital improvements: These are generally claimed over time or factored into CGT calculations.

Repairs and maintenance generally involve fixing or restoring something that is damaged or worn out, such as repairing a fence or fixing a leaking tap. These costs may often be claimed as an immediate tax deduction.

Capital improvements involve upgrading or improving the property, such as renovating a kitchen or replacing an entire roof. These expenses are usually claimed over time or factored into CGT calculations when the property is sold.

Review the ATO’s fact sheet here to learn more about possible obligations, and how you may stay organised.

At Aintree Group, we understand that compliance requirements can quickly become overwhelming. We help you understand your obligations, organise your records correctly, and claim entitled deductions, whilst maintaining compliance with the ATO.

Reach out to our team today to start.

This is general advice only and has not been prepared with your individual situation or needs in mind. For personalised advice, we highly recommend that you seek professional guidance from a qualified adviser.